The Senate bill has some good regulations, but it lacks teeth for real enforcement. Passing a law against something does not magically make it go away; we need look no farther than the amount of illegal drugs used in this country for proof.
The Senate bill does not create a national exchange, a national insurance commissioner; nor does it even repeal health insurance companies’ exemption from anti-trust laws, which would give the Federal Trade Commission some more oversight over health insurers. In effect it hands the states a piece of paper with a bunch of new regulations written on it and says, “Hey you, make sure these get enforced.” Given the very poor track record of state enforcement of insurance regulations this is a regulatory structure which is very bad for middle class American families but great for insurance companies.
State insurance commissioners are often political appointees who tend to have very close relationships with the insurance companies. Many after a relatively short time in the position go on to find very lucrative jobs in the industry they were supposed to police. Whether it is regulation of insurance companies or banks, we have seen firsthand the awful results of having a revolving door between regulator and industry. (There is also the related issue: can our country after years of Republican attacks on the idea of regulation and civil service even properly regulated extremely powerful corporations anymore? I strongly have my doubts and that is why I think a public insurance option is the only check against the private insurance industry that I think can work in this country.)
In many states like Texas, the governor has the power to appoint the state insurance commissioner. So Gov. Rick Perry, who strongly opposes the bill, has the power to appoint the guy whose job it will be to implement health care reform in Texas. This is not the implementation and regulatory structure you want if your goal is to make health care reform a national success. This is a recipe for a disaster. The patchwork quality of enforcement differing from state to state will ruin the entire insurance reform effort.
It is critical to focus on the long term implications of any reform effort. After a new reform structure is created it is almost impossible to scrap it and start over. Building reform on a foundation of failed state-based insurance regulators and wasteful private insurance companies is a terrible idea. Giving the broken private health insurance industry hundreds of billions in government money and millions of mandatory customers without serious checks on their behavior (public competition and a tough national regulation) will only make future efforts to get an actually functioning health care system even harder.
It doesn't take a magician's trick to figure out that the Senate bill fails to lay the ground work for future progressive change. It dooms health care activists to 40 years of fighting to undo the bad structure this Senate bill would put in place.
Dear Sen. Harkin, These Are Terrible Materials For Building A Starter Home
Sen. Tom Harkin continues to refer to the Senate health reform bill as a “starter home” in a new entry on the Huffington Post.
This bill has a terrible foundation. It is a starter home built with the equivalent of toxic drywall, lead paint, a poorly mixed cement foundation, and faulty electric wiring.
The bill is built on the extremely wasteful and inefficient private insurance system and contains one of the biggest rollbacks in decades of women's reproductive rights. It, in effect, gives a permanent exclusivity to expensive biologics, and still denies Americans the ability to buy cheaper drugs from overseas. It has insufficient regulations and leaves the regulator enforcement purely up to the states, which have a poor track record enforcing the current regulations on their books. Regulation without enforcement is worthless. It throws good money after bad without fixing the underlying problems. The cost of the insurance will be too high and the quality of the insurance is too low. Funneling billions of dollars and forcing millions of Americans to buy a product that is frankly a terrible bargain is not a good foundation to build on. It is only a good foundation for the private insurance companies because it further enriches and entrenches them. Rewarding the failure of the private health insurance system with even more money and more customers is not how you want to build your “starter home.”
Harkin is definitely correct when he says, “a starter home has plenty of room for additions and improvements.” There are many, many, many problems with this bill that need to be corrected. Unfortunately, no one is going to want to put additions on a terribly built home, and no one is going to want to rehire the same contractor that so completely botched the construction of the home to build the addition. I would love it if this were a smaller home, but built with a sturdy foundation.
In reality, what we have is a massive corporate giveaway that will serve to discredit the “progressive" principles that Harkin falsely claims this thing is built on. Teddy Roosevelt was the progressive trust buster. It makes a mockery of the term “progressive” to claim a plan to force Americans to buy expensive, low-quality goods from insurance companies exempt form anti-trust laws (laws that Roosevelt championed) and subsidized with taxpayer money is in anyway “progressive.”
Instead of that "partial loaf" analogy, I like to think of this bill as like a starter home. It is not the mansion of our dreams. But it has a solid foundation, giving every American access to quality, affordable coverage. It has an excellent, protective roof, which will shelter Americans from the worst abuses of health insurance companies. And this starter home has plenty of room for additions and improvements.
This bill has a terrible foundation. It is a starter home built with the equivalent of toxic drywall, lead paint, a poorly mixed cement foundation, and faulty electric wiring.
The bill is built on the extremely wasteful and inefficient private insurance system and contains one of the biggest rollbacks in decades of women's reproductive rights. It, in effect, gives a permanent exclusivity to expensive biologics, and still denies Americans the ability to buy cheaper drugs from overseas. It has insufficient regulations and leaves the regulator enforcement purely up to the states, which have a poor track record enforcing the current regulations on their books. Regulation without enforcement is worthless. It throws good money after bad without fixing the underlying problems. The cost of the insurance will be too high and the quality of the insurance is too low. Funneling billions of dollars and forcing millions of Americans to buy a product that is frankly a terrible bargain is not a good foundation to build on. It is only a good foundation for the private insurance companies because it further enriches and entrenches them. Rewarding the failure of the private health insurance system with even more money and more customers is not how you want to build your “starter home.”
Harkin is definitely correct when he says, “a starter home has plenty of room for additions and improvements.” There are many, many, many problems with this bill that need to be corrected. Unfortunately, no one is going to want to put additions on a terribly built home, and no one is going to want to rehire the same contractor that so completely botched the construction of the home to build the addition. I would love it if this were a smaller home, but built with a sturdy foundation.
In reality, what we have is a massive corporate giveaway that will serve to discredit the “progressive" principles that Harkin falsely claims this thing is built on. Teddy Roosevelt was the progressive trust buster. It makes a mockery of the term “progressive” to claim a plan to force Americans to buy expensive, low-quality goods from insurance companies exempt form anti-trust laws (laws that Roosevelt championed) and subsidized with taxpayer money is in anyway “progressive.”
American Private Health Insurance: A Very Bad Bargain
Medicare spends about 97 cents on every dollar it collects in premiums to provide care. The Senate bill, if enforced properly, would only require private insurance companies to spend 80 cents of every dollar on actual care. We are creating health care “reform” using a system that we know is dramatically more wasteful than public insurance, and then by forcing people to buy a product that is, frankly, a very bad bargain.
Let's just assume the Senate bill is passed into law with the minimum medical loss ratio of 80% for the individual market. For it to work, we will need the Secretary of HHS to not unilaterally gut the regulation using the very big loophole in the bill. We also need the state you are in to have a regulator willing and able to enforce the MLR regulation. We will need the insurance companies to not find a way to game the system, or create another loophole allowing themselves to reclassify a bunch of administrative work as care. Finally, we will need some way to make sure the insurance companies don't just jack up their pay to in-network providers to make the 20% margin big.
Assuming all these regulation elements work perfectly (which I highly doubt), the bill will still force people to buy insurance plans where 20 cents of every dollar they collect does not go to providing care. That is a massive amount of waste, and makes private insurance an incredibly bad bargain.
Insurance is meant to work by collecting premiums from everyone in the risk pool, equal to the potential risk for the whole pool, and than give that money to the few individuals who were unlikely. From the consumer's perspective, the best possible insurance should pay out over 100 cents for every dollar it collects in premiums to claimants. The insurance fund that holds the money until it is needed should be earning interest, giving it, technically, more money to pay out than it collected.
Of course, it is impossible to find this truly perfect insurance because there must always be some overhead costs. Someone needs to collect and write the checks, there needs to be some kind of fraud detection, and some form of customer service, etc.
While prefect insurance is impossible, public health insurance in this country, and around much of the world, has gotten pretty close. Medicare has a MLR of roughly 97%. It is even possible to make highly regulated private insurance relatively cost-effective. In the Netherlands and Switzerland, two examples of extremely regulated private insurance systems, the average administrative overhead is about 5%. So those countries have the equivalent of roughly a 95% medical loss ratio.
With that high a percentage of premiums going to care health insurance is a good bargain. With only 80 cents on the dollar going to provide care, the private insurance that people are going to be forced to buy is a rip off. If you pay $10,000 a year in premiums, a whole $2,000 will not go to help someone in your risk pool get care. If you were buying into Medicare, or the Dutch or Swiss system, only $300-$500 of your premium is being wasted on profit or administrative overhead.
With such a low MLR, private individual insurance in America will become a money-making scam into which Americans are forced to pay. The vast majority of Americans would be better off taking all the money they would spend in premiums and putting it into a savings account, and paying cash for all treatments (that is if we could get rid of this terrible incentive of allowing providers to secretly negotiate different rates with different insurers). In fact, the orthodox Calvinists in the Netherlands are allowed to use such a system to exempt themselves from their mandatory insurance system.
I have repeatedly said I'm not ideologically opposed to the general idea of an individual mandate. I know there are systems around the world that use a highly regulated market, plus generous subsidies, and an individual mandate to provide affordable, high-quality health insurance for almost everyone. But, for the system to work, the government must first guarantee, through regulation, that every citizen will have access to affordable, high-quality, cost-effective insurance. The Senate bill completely fails to do this. It will force people to buy poorly regulated, expensive, wasteful private insurance. Progressives should never accept an individual mandate until the government is willing make sure the insurance Americans are forced to buy is worth the cost.
Let's just assume the Senate bill is passed into law with the minimum medical loss ratio of 80% for the individual market. For it to work, we will need the Secretary of HHS to not unilaterally gut the regulation using the very big loophole in the bill. We also need the state you are in to have a regulator willing and able to enforce the MLR regulation. We will need the insurance companies to not find a way to game the system, or create another loophole allowing themselves to reclassify a bunch of administrative work as care. Finally, we will need some way to make sure the insurance companies don't just jack up their pay to in-network providers to make the 20% margin big.
Assuming all these regulation elements work perfectly (which I highly doubt), the bill will still force people to buy insurance plans where 20 cents of every dollar they collect does not go to providing care. That is a massive amount of waste, and makes private insurance an incredibly bad bargain.
Insurance is meant to work by collecting premiums from everyone in the risk pool, equal to the potential risk for the whole pool, and than give that money to the few individuals who were unlikely. From the consumer's perspective, the best possible insurance should pay out over 100 cents for every dollar it collects in premiums to claimants. The insurance fund that holds the money until it is needed should be earning interest, giving it, technically, more money to pay out than it collected.
Of course, it is impossible to find this truly perfect insurance because there must always be some overhead costs. Someone needs to collect and write the checks, there needs to be some kind of fraud detection, and some form of customer service, etc.
While prefect insurance is impossible, public health insurance in this country, and around much of the world, has gotten pretty close. Medicare has a MLR of roughly 97%. It is even possible to make highly regulated private insurance relatively cost-effective. In the Netherlands and Switzerland, two examples of extremely regulated private insurance systems, the average administrative overhead is about 5%. So those countries have the equivalent of roughly a 95% medical loss ratio.
With that high a percentage of premiums going to care health insurance is a good bargain. With only 80 cents on the dollar going to provide care, the private insurance that people are going to be forced to buy is a rip off. If you pay $10,000 a year in premiums, a whole $2,000 will not go to help someone in your risk pool get care. If you were buying into Medicare, or the Dutch or Swiss system, only $300-$500 of your premium is being wasted on profit or administrative overhead.
With such a low MLR, private individual insurance in America will become a money-making scam into which Americans are forced to pay. The vast majority of Americans would be better off taking all the money they would spend in premiums and putting it into a savings account, and paying cash for all treatments (that is if we could get rid of this terrible incentive of allowing providers to secretly negotiate different rates with different insurers). In fact, the orthodox Calvinists in the Netherlands are allowed to use such a system to exempt themselves from their mandatory insurance system.
I have repeatedly said I'm not ideologically opposed to the general idea of an individual mandate. I know there are systems around the world that use a highly regulated market, plus generous subsidies, and an individual mandate to provide affordable, high-quality health insurance for almost everyone. But, for the system to work, the government must first guarantee, through regulation, that every citizen will have access to affordable, high-quality, cost-effective insurance. The Senate bill completely fails to do this. It will force people to buy poorly regulated, expensive, wasteful private insurance. Progressives should never accept an individual mandate until the government is willing make sure the insurance Americans are forced to buy is worth the cost.
The Public Option Is Not Symbolic; It Is Foundational
There is a myth that the public option was only a tiny idea blown out of proportion for symbolic reasons. The public option was never going to be truly tiny, it was only going to be small at its inception. It is not because it was "weak," it was just strongly caged in. But even the largest redwood tree starts out as a very small seed.
It is true that the CBO predicted that the negotiated rate public option in the House bill would only cover 6 million people, but that is because it was purposely restricted to a new exchange that would only be used by 30 million people at first. The CBO's guess was that the public option would be selected by 20% of the people in this new marketplace. While I think their 20% estimate is low, it is important to put that in context--any company that can grab 20% of its market is a major player.
The public option was projected to be “small” because it would be forced to be a big fish in a very small pond. It would have major potential for growth. Progressives would have at their disposal multiple ways to increase the number of people who could have access to the public option. Dramatically expanding employer access to the exchange (something the Secretary of HHS could do without Congressional approval) is one idea. Expanding on Sen. Ron Wyden's goal of giving people with employer-provided coverage the option of using vouchers to select their own plan on the new exchange is another route. The best solution might have been to attach a simple 12-word provision to the defense appropriations bill to allow the public option to sell outside the exchange. Any of these are very doable changes that could have completely changed the dynamics in only a few years.
If the public option was able to to sell to the entire private insurance market and just not the exchange gaining 20% of the market would have given it over 50 million customers. This would make the public option larger than Medicare, and one of the three largest insurance companies in America. Assuming the public option's larger market share allowed it to negotiate much better rates (or even better, Congress decided to combine its operations with Medicare), it would probably be able to attract even more than 50 million customers.
The argument over the public option has never been symbolic or about what coverage a small group of Americans would or would not get. This health care fight is not about creating one new, static system that would remain in place forever. To argue otherwise is intellectual dishonesty put forward by many, including the Obama administration. The debate has been about the foundation on which we will build the future of our health care system, and whether the solution to our broken system is public or private insurance. Everyone from progressive activists to health insurance company CEO's understood that this reform could grow, and only minor tweaks made later would make the public option a serious player. That is why the public option has been such a big fight on both sides. It was never about symbolism, but about laying down an infrastructure that could be quickly built upon.
The progressive demand that public health insurance programs must be part of the solution is based not on pure ideology, but overwhelming domestic and international evidence. The track record of private insurance is terrible, and no honest economist could look its performance compared to public insurance and think it a smart solution. The public option is not symbolic, it is foundational. Can the Democratic Party act in the best interest of our country by standing up to the health care lobbyists, or will they reward the private health insurance industry? This is not some metaphysical argument. There are literally hundreds of billions riding on this question, and possibly the future international competitiveness of the American economy. You may not agree with the methods that the supporters of the public option are using, but pretending that they are somehow fools chasing after symbolism completely ignores what the true stakes in the fight really are.
It is true that the CBO predicted that the negotiated rate public option in the House bill would only cover 6 million people, but that is because it was purposely restricted to a new exchange that would only be used by 30 million people at first. The CBO's guess was that the public option would be selected by 20% of the people in this new marketplace. While I think their 20% estimate is low, it is important to put that in context--any company that can grab 20% of its market is a major player.
The public option was projected to be “small” because it would be forced to be a big fish in a very small pond. It would have major potential for growth. Progressives would have at their disposal multiple ways to increase the number of people who could have access to the public option. Dramatically expanding employer access to the exchange (something the Secretary of HHS could do without Congressional approval) is one idea. Expanding on Sen. Ron Wyden's goal of giving people with employer-provided coverage the option of using vouchers to select their own plan on the new exchange is another route. The best solution might have been to attach a simple 12-word provision to the defense appropriations bill to allow the public option to sell outside the exchange. Any of these are very doable changes that could have completely changed the dynamics in only a few years.
If the public option was able to to sell to the entire private insurance market and just not the exchange gaining 20% of the market would have given it over 50 million customers. This would make the public option larger than Medicare, and one of the three largest insurance companies in America. Assuming the public option's larger market share allowed it to negotiate much better rates (or even better, Congress decided to combine its operations with Medicare), it would probably be able to attract even more than 50 million customers.
The argument over the public option has never been symbolic or about what coverage a small group of Americans would or would not get. This health care fight is not about creating one new, static system that would remain in place forever. To argue otherwise is intellectual dishonesty put forward by many, including the Obama administration. The debate has been about the foundation on which we will build the future of our health care system, and whether the solution to our broken system is public or private insurance. Everyone from progressive activists to health insurance company CEO's understood that this reform could grow, and only minor tweaks made later would make the public option a serious player. That is why the public option has been such a big fight on both sides. It was never about symbolism, but about laying down an infrastructure that could be quickly built upon.
The progressive demand that public health insurance programs must be part of the solution is based not on pure ideology, but overwhelming domestic and international evidence. The track record of private insurance is terrible, and no honest economist could look its performance compared to public insurance and think it a smart solution. The public option is not symbolic, it is foundational. Can the Democratic Party act in the best interest of our country by standing up to the health care lobbyists, or will they reward the private health insurance industry? This is not some metaphysical argument. There are literally hundreds of billions riding on this question, and possibly the future international competitiveness of the American economy. You may not agree with the methods that the supporters of the public option are using, but pretending that they are somehow fools chasing after symbolism completely ignores what the true stakes in the fight really are.
The Incredibly Stupid Politics Of Delaying Benefits
If there was any one single completely terrible political decision made by Democrats during this health care debate, it was to “save money” by delaying the start of reform. This is an act of political foolishness so profound, I'm, to this day, at a loss for words. Making the bill appear $100-300 billion cheaper simply is not worth the medium term political damage that delaying reform will do to the Democrats.
Paul Krugman thinks it is a very bad politics for Republicans to run on repealing the bill. His evidence is even though reform is not very popular in Massachusetts, repealing it is even less popular. But this is a pretty worthless comparison. Reform is already in place in Massachusetts. People can see who it helps and who it hurts. They know how it works, and can make an informed decision about it.
If this Senate bill is passed into law, it will do very little until 2014. For the 2010 and 2012 elections, the health care reform bill will mainly be a far away promise (or impending threat). Votes in 2010 and 2012 will not be anywhere nearly as informed as the people in Massachusetts are. Even if it is impossible for Republicans to get the seats necessary and summon the desire to spend the political capital needed to actually repeal the whole reform package, that does not mean it will be a bad campaign issue. I can picture many Republicans in 2010 and 2012 pointing to high premiums and people still uninsured as proof that Democrats “failed.” If you expect Republicans to be honest about reform during a campaign, you have not been paying attention.
I think about the fate of Ben Nelson in Nebraska. Recent polling shows his vote for health care has hurt him in Nebraska, but he is not up for re-election until 2012. Now, it is possible that by 2012, health care will have dropped off everyone's radar, but it will definitely not be something Nelson will want to campaign on. He will have made a big vote three years prior for a bill that will still have almost no tangible benefits (but some tangible pain in the form of taxes and Medicare advantage reforms) to show for it.
If Democrats were a sensible political party, they would have started reform as soon as possible (probably about 6-12 months from now for most of it). That way senators like Ben Nelson would have the program in place serving people for a full two years before his election. If it succeed he could run on it. If it failed, well politicians deserve to lose for passing bad legislation.
I don't know if Democrats primarily delayed the start of reform until after the 2012 presidential elections because they know it would not be popular to implement, or because of a terrible political calculation based on their insane fetish with the CBO. I still have not decided which scenario would give me a less negative impression of the party.
Paul Krugman thinks it is a very bad politics for Republicans to run on repealing the bill. His evidence is even though reform is not very popular in Massachusetts, repealing it is even less popular. But this is a pretty worthless comparison. Reform is already in place in Massachusetts. People can see who it helps and who it hurts. They know how it works, and can make an informed decision about it.
If this Senate bill is passed into law, it will do very little until 2014. For the 2010 and 2012 elections, the health care reform bill will mainly be a far away promise (or impending threat). Votes in 2010 and 2012 will not be anywhere nearly as informed as the people in Massachusetts are. Even if it is impossible for Republicans to get the seats necessary and summon the desire to spend the political capital needed to actually repeal the whole reform package, that does not mean it will be a bad campaign issue. I can picture many Republicans in 2010 and 2012 pointing to high premiums and people still uninsured as proof that Democrats “failed.” If you expect Republicans to be honest about reform during a campaign, you have not been paying attention.
I think about the fate of Ben Nelson in Nebraska. Recent polling shows his vote for health care has hurt him in Nebraska, but he is not up for re-election until 2012. Now, it is possible that by 2012, health care will have dropped off everyone's radar, but it will definitely not be something Nelson will want to campaign on. He will have made a big vote three years prior for a bill that will still have almost no tangible benefits (but some tangible pain in the form of taxes and Medicare advantage reforms) to show for it.
If Democrats were a sensible political party, they would have started reform as soon as possible (probably about 6-12 months from now for most of it). That way senators like Ben Nelson would have the program in place serving people for a full two years before his election. If it succeed he could run on it. If it failed, well politicians deserve to lose for passing bad legislation.
I don't know if Democrats primarily delayed the start of reform until after the 2012 presidential elections because they know it would not be popular to implement, or because of a terrible political calculation based on their insane fetish with the CBO. I still have not decided which scenario would give me a less negative impression of the party.
Medicare, Medicaid, And A Stark Warning About Having States Execute Reform
The Social Security Act of 1965 created two public insurance programs, Medicare and Medicaid. One proved to be a big success, and the other, not so much. The question everyone should be asking is will this health care package follow the route of Medicare or Medicaid?
Of the two programs, it would be fair to say that Medicare has proven to be the much greater success in terms of policy and politics. Medicare is a much beloved program, and it's benefits have expanded greatly over the years.
Medicaid, on the other hand, ended up the bastard stepchild of the two programs. In some states, it has done a decent job of providing health insurance for the poor, but in many others, it is almost impossible for the poor gain access to the program. Not only does who Medicaid covers vary greatly from state to state, but so does the quality of the coverage. Medicaid lacks the popular support or active voting constituency that Medicare has, leaving it very susceptible to budget cuts and political attacks.
Why has Medicare been so much more successful? I suspect it succeeded for three main reasons: It is a fully federal program, it helps a broad cross section of American people, and it has a sufficiently large base of active users. By being a fully federal program, Medicare is equally as good in red states as it is in blue states. It was not carved up, poorly executed, improperly regulated, or underfunded in many states for ideological reasons, or out of budgetary necessity. Being a fully federal program was very important, and made sure its success with felt by people equally across the entire country.
Having Medicare serve everyone over 65 gave it a strong cross-section of supporters. It benefits the rich as well as poor. It helps everyone--from truck drivers and factory worker, to lawyers, politicians, and doctors--this has ensured that at least some of the people on Medicare are well-organized, politically active members of society. Finally, Medicare covers roughly 13% of Americans, and a greater percentage of voters. This is a large enough chunk voters that it makes messing with Medicare very dangerous politically.
Medicaid lacks all three of those benefits, and this hobbled the program. The political compromise reached back in 1965 to make it a partnership between the federal government and the states has proven to be a disaster. Giving states the power to control the program has ended up hurting millions over the past several decades. Many states heavily restricted who could sign up for Medicaid. This created a vicious cycle: few people are helped by the program, so few people defend it from further cuts.
Medicaid only serves the poor, and that is a group of people that tends to have the least political power, little ability to organize, and low voter turnout. Combined with the fact that some states severely restrict who can sign up for Medicaid, there is not a strong, built-in, national user base to push for improvements to the program or protect it.
What path will this new health care reform bill follow? My strong hope was that the House bill would follow Medicare. It has a national exchange that is funded directly by the federal government. There is national regulation of the insurance industry, and a nationwide public option. The House bill also provides for greater subsidies and higher actuarial value plans. I can envision how the public option and national regulation would help keep costs down, and make this national exchange a decent place to buy insurance. This would give many small- and medium-sized businesses a strong incentive to use the national exchange. The result would be a program with a significant user base that includes a broad cross-section of Americans throughout the country. This creates the political will to expand and improve the program.
With the Senate bill, I simply can't see how it would not take the failed path of Medicaid. All the wrong compromises were made, and all the wrong corners were cut to bring down the CBO price tag. It will not be a federal program, but a program that leaves the bulk of the implementation and regulation to the states. Given the number of red states trying to “opt-out” of the whole reform package, and the general failure of state insurance commissioners to really hold insurance companies accountable, I think it is foolish to expect this state-based structure to work. The federal government doesn't even fund the continued maintenance of the state-based exchanges that are meant to enforce most of the rules. This is the essentially definition of penny wise and pound foolish.
The subsidies in the Senate bill are too small, the quality of the insurance is too low, and in many places, the enforcement will be too weak. These state-based exchange will not be seen as a good place to buy insurance, so only people who must use them will. Businesses, for the most part, will shun them. In some states, it might be executed well, but in many, it will be a failure. The program will be seen as a welfare-like structure that only serves a very small group of mostly lower income and politically less involved Americans. Even the people using the system may appreciate the help, but not feel a strong attachment to the program, due to its low quality of insurance. Costs will continue to grow, and it could easily become a target for budget cuts and the magic power of “de-regulation.” Death by a thousand cuts.
Only now, 45 years after Medicaid was created, has the Federal government finally put it on a path that might fix its inherent flaws and have it live up to its potential. It will begin nationalizing most of the funding, requirements, and benefits. Imagine how much better the last 45 years would have been, if not for the very bad compromise of making Medicaid a state/federal partnership instead of a true federal program. Progressives must not let this health care reform effort suffer the same fate. If progressives do not fight hard to make sure this reform package produces a workable and popular insurance program, it will be a long term disaster. Do not let short-term political expediency saddle this nation with long-term problems. I do not want it to be another 45 years before we finally start trying to fix the inherently broken structure of the Senate bill in a way that we could have done in the first place.
Of the two programs, it would be fair to say that Medicare has proven to be the much greater success in terms of policy and politics. Medicare is a much beloved program, and it's benefits have expanded greatly over the years.
Medicaid, on the other hand, ended up the bastard stepchild of the two programs. In some states, it has done a decent job of providing health insurance for the poor, but in many others, it is almost impossible for the poor gain access to the program. Not only does who Medicaid covers vary greatly from state to state, but so does the quality of the coverage. Medicaid lacks the popular support or active voting constituency that Medicare has, leaving it very susceptible to budget cuts and political attacks.
Why has Medicare been so much more successful? I suspect it succeeded for three main reasons: It is a fully federal program, it helps a broad cross section of American people, and it has a sufficiently large base of active users. By being a fully federal program, Medicare is equally as good in red states as it is in blue states. It was not carved up, poorly executed, improperly regulated, or underfunded in many states for ideological reasons, or out of budgetary necessity. Being a fully federal program was very important, and made sure its success with felt by people equally across the entire country.
Having Medicare serve everyone over 65 gave it a strong cross-section of supporters. It benefits the rich as well as poor. It helps everyone--from truck drivers and factory worker, to lawyers, politicians, and doctors--this has ensured that at least some of the people on Medicare are well-organized, politically active members of society. Finally, Medicare covers roughly 13% of Americans, and a greater percentage of voters. This is a large enough chunk voters that it makes messing with Medicare very dangerous politically.
Medicaid lacks all three of those benefits, and this hobbled the program. The political compromise reached back in 1965 to make it a partnership between the federal government and the states has proven to be a disaster. Giving states the power to control the program has ended up hurting millions over the past several decades. Many states heavily restricted who could sign up for Medicaid. This created a vicious cycle: few people are helped by the program, so few people defend it from further cuts.
Medicaid only serves the poor, and that is a group of people that tends to have the least political power, little ability to organize, and low voter turnout. Combined with the fact that some states severely restrict who can sign up for Medicaid, there is not a strong, built-in, national user base to push for improvements to the program or protect it.
What path will this new health care reform bill follow? My strong hope was that the House bill would follow Medicare. It has a national exchange that is funded directly by the federal government. There is national regulation of the insurance industry, and a nationwide public option. The House bill also provides for greater subsidies and higher actuarial value plans. I can envision how the public option and national regulation would help keep costs down, and make this national exchange a decent place to buy insurance. This would give many small- and medium-sized businesses a strong incentive to use the national exchange. The result would be a program with a significant user base that includes a broad cross-section of Americans throughout the country. This creates the political will to expand and improve the program.
With the Senate bill, I simply can't see how it would not take the failed path of Medicaid. All the wrong compromises were made, and all the wrong corners were cut to bring down the CBO price tag. It will not be a federal program, but a program that leaves the bulk of the implementation and regulation to the states. Given the number of red states trying to “opt-out” of the whole reform package, and the general failure of state insurance commissioners to really hold insurance companies accountable, I think it is foolish to expect this state-based structure to work. The federal government doesn't even fund the continued maintenance of the state-based exchanges that are meant to enforce most of the rules. This is the essentially definition of penny wise and pound foolish.
The subsidies in the Senate bill are too small, the quality of the insurance is too low, and in many places, the enforcement will be too weak. These state-based exchange will not be seen as a good place to buy insurance, so only people who must use them will. Businesses, for the most part, will shun them. In some states, it might be executed well, but in many, it will be a failure. The program will be seen as a welfare-like structure that only serves a very small group of mostly lower income and politically less involved Americans. Even the people using the system may appreciate the help, but not feel a strong attachment to the program, due to its low quality of insurance. Costs will continue to grow, and it could easily become a target for budget cuts and the magic power of “de-regulation.” Death by a thousand cuts.
Only now, 45 years after Medicaid was created, has the Federal government finally put it on a path that might fix its inherent flaws and have it live up to its potential. It will begin nationalizing most of the funding, requirements, and benefits. Imagine how much better the last 45 years would have been, if not for the very bad compromise of making Medicaid a state/federal partnership instead of a true federal program. Progressives must not let this health care reform effort suffer the same fate. If progressives do not fight hard to make sure this reform package produces a workable and popular insurance program, it will be a long term disaster. Do not let short-term political expediency saddle this nation with long-term problems. I do not want it to be another 45 years before we finally start trying to fix the inherently broken structure of the Senate bill in a way that we could have done in the first place.
If This Were Germany, Denmark, Belgium, or France, We Would Not Need Affordability Tax Credits
Our health care system is unbelievably more expensive than any other first world nation. On a per capita basis, we spend over 50% more on health care than the second most expensive nation, Norway. As a nation, we spend more than twice as much per capita on health care than first world countries like Germany, Denmark, Belgium, France, Sweden, the UK, or Australia. If we actually got real health care reform that brought our health care costs down closer to the rest of the industrialized world, their would be no need to grant affordability tax credits on the new exchange.
In 2016, the Senate bill will spend $76 billion on affordability tax credits in the new exchange. The CBO says in 2016,
Using this data, I can estimate that roughly $210 billion will be spent on premiums in the non-group market in 2016. Of that $210 billion, about 36% ($76 billion) will by paid for by the government in the form of tax credits, and about 64% ($134 billion) will be paid directly by individuals.
If we had a health care system as cost effective as Germany, Denmark, or France, that $134 billion paid by individuals would be more than enough to cover everyone in the non-group market with several billion left over. If we could truly reform our broken health care system and bring its costs in line with the rest of the industrialized world, there would be no need for large government tax credits on the exchange. Think about that for a moment. Even with the government picking up about 36% of the cost, individuals in the new exchanges would still be dramatically overpaying for health insurance compared to the rest of the world.
What this bill does is expand something called “coverage” and adds some new regulations to insures. It is not real health care reform. Because Obama cut sweetheart deals with the hospitals, doctors, and drug companies, true cost-controlling reform became impossible.
Some supporters of the Senate bill have pointed to all the money going to middle class families to help them afford insurance as a great thing. The help is nice, but it only points to how terrible the underlying problem really is. It is simply a strategy of throwing good money after bad. Middle class families should not need government subsidies to afford health insurance. What middle class American families really need is for our government to rein in the different industries ruining our health care system, not pass a bill that will only enrich and empower them further.
In 2016, the Senate bill will spend $76 billion on affordability tax credits in the new exchange. The CBO says in 2016,
The majority of nongroup enrollees (about 57 percent) would receive subsidies via the new insurance exchanges, and those subsidies, on average, would cover nearly two-thirds of the total premium
Using this data, I can estimate that roughly $210 billion will be spent on premiums in the non-group market in 2016. Of that $210 billion, about 36% ($76 billion) will by paid for by the government in the form of tax credits, and about 64% ($134 billion) will be paid directly by individuals.
If we had a health care system as cost effective as Germany, Denmark, or France, that $134 billion paid by individuals would be more than enough to cover everyone in the non-group market with several billion left over. If we could truly reform our broken health care system and bring its costs in line with the rest of the industrialized world, there would be no need for large government tax credits on the exchange. Think about that for a moment. Even with the government picking up about 36% of the cost, individuals in the new exchanges would still be dramatically overpaying for health insurance compared to the rest of the world.
What this bill does is expand something called “coverage” and adds some new regulations to insures. It is not real health care reform. Because Obama cut sweetheart deals with the hospitals, doctors, and drug companies, true cost-controlling reform became impossible.
Some supporters of the Senate bill have pointed to all the money going to middle class families to help them afford insurance as a great thing. The help is nice, but it only points to how terrible the underlying problem really is. It is simply a strategy of throwing good money after bad. Middle class families should not need government subsidies to afford health insurance. What middle class American families really need is for our government to rein in the different industries ruining our health care system, not pass a bill that will only enrich and empower them further.
Don't Put Too Much Faith In Kaiser Foundation Subsidy Calculator
The Kaiser Family Foundation is a often a good source of health care information. I appreciated what they a trying to do with their subsidy calculator, but, unfortunately, it could leave many Americans with a false impression of how much reform will cost them once the bill is implemented.
The issue is that the calculator is presenting the results “in terms of 2009 premium and income levels to enable better comparisons to current circumstances.” This glosses over the biggest problem with our health care system. Not only does our health care cost too much now, but our health care inflation is out of control. For example, for the last several years the average premiums for a family of four have been increasing by roughly a $1,000 a year. I don't think most economists expect either reform bill to really reduce the growth rate in premiums over the next five years, and I doubt there is a single economist who will bet premiums will not grow at a rate faster than wages over the next five years.
By calculating results in today's dollars and premiums, the subsidy calculator will give a segment of people an unduly rosy prediction about how much insurance will cost as a result of reform and the affordability tax credits. For people who the calculator currently says will receive subsidies, the relative cost of their health insurance premiums compared to their income should be similar to what it will be in 2015 when reform is fully underway (since tax credits are determined by a percentage of income). But for people who make over 400% FPL, or make less than 400% FPL, but, due to their age were told by the calculator that their premiums would be low enough they would not need tax credits, the calculation will not reflect reality.
For example, the calculator for the Senate bill says a 30-year-old single adult making $33,000 would only pay $2,676 (8.1% of their income) on health care premiums and would receive no subsidies using today's premium prices. While this might be true if the rules in the bill were already in place in 2009, reforms will not really be in effect until 2014. Premiums are sure to rise faster than wages between now and 2015. By 2015, it is very *likely that insurance premiums for a 30-year-old will be much higher than 8.1% of his income, and probably higher than 9.8% (the limit at which one starts getting government subsidies).
The Kasier Family Foundation subsidies calculator is a useful but flawed tool. They can not actually predict what the exact growth rate in premiums will be between now and when reform starts, so the calculator ignores this important variable by making all the calculations based on today's costs and wages. For some, the calculator will be a relatively accurate prediction of relative premium costs compared to income. But, for a significant segment of people, the calculator is giving individuals the false impression that their premiums would be noticeably lower than they will almost certainly turn out to be.
The issue is that the calculator is presenting the results “in terms of 2009 premium and income levels to enable better comparisons to current circumstances.” This glosses over the biggest problem with our health care system. Not only does our health care cost too much now, but our health care inflation is out of control. For example, for the last several years the average premiums for a family of four have been increasing by roughly a $1,000 a year. I don't think most economists expect either reform bill to really reduce the growth rate in premiums over the next five years, and I doubt there is a single economist who will bet premiums will not grow at a rate faster than wages over the next five years.
By calculating results in today's dollars and premiums, the subsidy calculator will give a segment of people an unduly rosy prediction about how much insurance will cost as a result of reform and the affordability tax credits. For people who the calculator currently says will receive subsidies, the relative cost of their health insurance premiums compared to their income should be similar to what it will be in 2015 when reform is fully underway (since tax credits are determined by a percentage of income). But for people who make over 400% FPL, or make less than 400% FPL, but, due to their age were told by the calculator that their premiums would be low enough they would not need tax credits, the calculation will not reflect reality.
For example, the calculator for the Senate bill says a 30-year-old single adult making $33,000 would only pay $2,676 (8.1% of their income) on health care premiums and would receive no subsidies using today's premium prices. While this might be true if the rules in the bill were already in place in 2009, reforms will not really be in effect until 2014. Premiums are sure to rise faster than wages between now and 2015. By 2015, it is very *likely that insurance premiums for a 30-year-old will be much higher than 8.1% of his income, and probably higher than 9.8% (the limit at which one starts getting government subsidies).
The Kasier Family Foundation subsidies calculator is a useful but flawed tool. They can not actually predict what the exact growth rate in premiums will be between now and when reform starts, so the calculator ignores this important variable by making all the calculations based on today's costs and wages. For some, the calculator will be a relatively accurate prediction of relative premium costs compared to income. But, for a significant segment of people, the calculator is giving individuals the false impression that their premiums would be noticeably lower than they will almost certainly turn out to be.
The Small State-Based Exchanges In The Senate Bill Will Not Control Costs
Almost all evidence points to the simple conclusion that the new health insurance market places in the Senate bill called “exchanges” will not slow the out-of-control increase in health care costs. Similar exchanges have been tried in this country and have failed to slow the growth rate in health care. The two best examples are the Federal Employee Health Benefit (FEHB) plan and the California Public Employee's Retirement System (CalPERS).
The FEHB provides health insurance for roughly 8 million Americans, while CalPERS provides insurance for roughly 1.3 million. Over the long term, both have health care growth rates on par with the average for large employer plans. This was the general conclusion of a GAO report in 2007, and similar study in 2009 by the Kaiser Family Foundation. A GAO study from 2000 found that small employer purchasing cooperatives (very similar to exchanges) also failed to bring down overall costs. If these two public employee exchanges with decades of experience managing health care benefits have failed to control costs, there seems little reason to suspect the smaller exchange in the Senate bill will perform any better.
The Senate bill will produce at least one exchange per state, and is designed to create two exchanges per state (one for the individual market and one for small businesses), which can be merged if the state chooses. The bill will allow states to further divide up their exchanges by region of the state, or merge with other states.
For the sake of argument, let's assume only 50 state-based exchanges are created and no state is foolish enough to follow the bill's intention of dividing the risk pool more by creating two separate exchanges. Only about 10% of people in the country will use one of these exchanges. That means not even the largest state, California, will have an exchange with more people/market power than the FEHB. At most, five states (CA, TX, NY, FL, IL) are likely to have exchanges with more users than CalPERS. Many of the smaller states will end up with exchanges that have fewer users than several of the largest private employer-provided plans.
If you believe exchanges--which serve only as a regulated centralized marketplace for the current broken private health insurance companies--will bring costs under control, I have yet to see any strong evidence for that position. If your excuse for the failure of FEHB and CalPERS to control cost is that they lack sufficient market size to bring down cost, then the smaller, state-based exchanges created in the Senate bill are clearly doomed to fail for the exact same reason. Under this big market size theory for exchanges, only the single nationwide exchange created in the House bill, with roughly 30 million users, might be large enough to bring down cost.
Personally, I think the entire concept of exchanges as designed in either bill is flawed, based on both the domestic and international evidence. I believe only a centralized provider reimbursement negotiator for all plans on the exchange (similar to Switzerland, Belgium, and the Netherlands), precisely defined benefit packages, and/or a robust public competitor (the public option) can bring down cost. While the public option in the House bill is much weaker than I would like, I agree with the CBO's conclusion that it would put downward pressure on premiums.
There are two reasons, the public option and large size, which lead me to believe it is possible the House bill's exchange might bring down the growth in heath insurance premiums. This is why I support that bill. I simply have no reason to believe that the Senate bill's system of small, state-based exchanges run by local insurance commissioners will be able to control cost. This is why I can't support that bill.
*One caveat: Exchanges, by reducing some administrative work for both customers and insurers, will see a one-time drop in cost. By spreading the risk of a larger pool, some high-risk people will see their premiums go down, while others will see their premiums go up. A one-time drop in price due to reduced adminstrative work and averaging out the premium increases over a large group will not change the current, terrible trajectory we are on for health care costs. Average costs in the small state-based exchanges will continue to rise at the same dangerous pace as the rest of our private, employer-based insurance system. They will do nothing to stop the inpendening economic disaster that will be caused by our failure to rein in the health care industries.
The FEHB provides health insurance for roughly 8 million Americans, while CalPERS provides insurance for roughly 1.3 million. Over the long term, both have health care growth rates on par with the average for large employer plans. This was the general conclusion of a GAO report in 2007, and similar study in 2009 by the Kaiser Family Foundation. A GAO study from 2000 found that small employer purchasing cooperatives (very similar to exchanges) also failed to bring down overall costs. If these two public employee exchanges with decades of experience managing health care benefits have failed to control costs, there seems little reason to suspect the smaller exchange in the Senate bill will perform any better.
The Senate bill will produce at least one exchange per state, and is designed to create two exchanges per state (one for the individual market and one for small businesses), which can be merged if the state chooses. The bill will allow states to further divide up their exchanges by region of the state, or merge with other states.
For the sake of argument, let's assume only 50 state-based exchanges are created and no state is foolish enough to follow the bill's intention of dividing the risk pool more by creating two separate exchanges. Only about 10% of people in the country will use one of these exchanges. That means not even the largest state, California, will have an exchange with more people/market power than the FEHB. At most, five states (CA, TX, NY, FL, IL) are likely to have exchanges with more users than CalPERS. Many of the smaller states will end up with exchanges that have fewer users than several of the largest private employer-provided plans.
If you believe exchanges--which serve only as a regulated centralized marketplace for the current broken private health insurance companies--will bring costs under control, I have yet to see any strong evidence for that position. If your excuse for the failure of FEHB and CalPERS to control cost is that they lack sufficient market size to bring down cost, then the smaller, state-based exchanges created in the Senate bill are clearly doomed to fail for the exact same reason. Under this big market size theory for exchanges, only the single nationwide exchange created in the House bill, with roughly 30 million users, might be large enough to bring down cost.
Personally, I think the entire concept of exchanges as designed in either bill is flawed, based on both the domestic and international evidence. I believe only a centralized provider reimbursement negotiator for all plans on the exchange (similar to Switzerland, Belgium, and the Netherlands), precisely defined benefit packages, and/or a robust public competitor (the public option) can bring down cost. While the public option in the House bill is much weaker than I would like, I agree with the CBO's conclusion that it would put downward pressure on premiums.
There are two reasons, the public option and large size, which lead me to believe it is possible the House bill's exchange might bring down the growth in heath insurance premiums. This is why I support that bill. I simply have no reason to believe that the Senate bill's system of small, state-based exchanges run by local insurance commissioners will be able to control cost. This is why I can't support that bill.
*One caveat: Exchanges, by reducing some administrative work for both customers and insurers, will see a one-time drop in cost. By spreading the risk of a larger pool, some high-risk people will see their premiums go down, while others will see their premiums go up. A one-time drop in price due to reduced adminstrative work and averaging out the premium increases over a large group will not change the current, terrible trajectory we are on for health care costs. Average costs in the small state-based exchanges will continue to rise at the same dangerous pace as the rest of our private, employer-based insurance system. They will do nothing to stop the inpendening economic disaster that will be caused by our failure to rein in the health care industries.
Mary Landrieu Magically Cares About Cost Control When It Might Help Millionares
After working very hard to kill many progressive idea about how best to control health care costs, Mary Landrieu has found one she likes. Too bad it is the one that will most benefit millionaires:
I can only support a bill if the Cadillac plans are taxed at the level they are in the Senate [bill,]” said Landrieu. “It’s not because I’m thrilled about taxing those plans, which I’m not, but it is the No. 1 cost-containment measure in the bill. It’s what is going to drive costs down over time.”
Well that is just a great justification for keeping the Cadillac tax. After Landrieu fought for months to kill the public option in the Senate, which would have brought down costs, and voted against drug re-importation that the CBO said would save American consumers around $100 billion, she is worried about cost control. I can only assume based on her vote on the Dorgan amendment that she would also be opposed to government price controls on drugs, to get them in line with prices in Canada, or direct Medicare drug price negotiations, since both would upset PhRMA. It seems Landrieu is against the progressive ideas for controlling health care's spiraling costs, but uses the issue of "cost control" to defend only one provision.
With the terrible Senate bill already written, Landrieu has magically transformed into someone who cares about cost control. She has laid down a marker on the so-called “Cadillac tax” on health care benefits even though the CMS says it will cause millions of Americans to see increased co-pays and deductibles, while only reducing national health expenditures by a measly 0.3%.
By demanding to keep the excise tax on health care plans unchanged and the overall price tag the same it means the millionaires surtax in the House bill is likely to be dropped or dramatically scaled back. Does a millionaire like Landrieu really feel passionately about the need to tax health insurance benefits, or is it just that she is passionately opposed to the House's alternative funding mechanism, which is increasing taxes for millionaires? I will let others judge, but I think the evidence clearly points to one conclusion.
I can only support a bill if the Cadillac plans are taxed at the level they are in the Senate [bill,]” said Landrieu. “It’s not because I’m thrilled about taxing those plans, which I’m not, but it is the No. 1 cost-containment measure in the bill. It’s what is going to drive costs down over time.”
Well that is just a great justification for keeping the Cadillac tax. After Landrieu fought for months to kill the public option in the Senate, which would have brought down costs, and voted against drug re-importation that the CBO said would save American consumers around $100 billion, she is worried about cost control. I can only assume based on her vote on the Dorgan amendment that she would also be opposed to government price controls on drugs, to get them in line with prices in Canada, or direct Medicare drug price negotiations, since both would upset PhRMA. It seems Landrieu is against the progressive ideas for controlling health care's spiraling costs, but uses the issue of "cost control" to defend only one provision.
With the terrible Senate bill already written, Landrieu has magically transformed into someone who cares about cost control. She has laid down a marker on the so-called “Cadillac tax” on health care benefits even though the CMS says it will cause millions of Americans to see increased co-pays and deductibles, while only reducing national health expenditures by a measly 0.3%.
By demanding to keep the excise tax on health care plans unchanged and the overall price tag the same it means the millionaires surtax in the House bill is likely to be dropped or dramatically scaled back. Does a millionaire like Landrieu really feel passionately about the need to tax health insurance benefits, or is it just that she is passionately opposed to the House's alternative funding mechanism, which is increasing taxes for millionaires? I will let others judge, but I think the evidence clearly points to one conclusion.
"Fiscal Conservatives” Waste $200-$350 Billion To Subsidize Private Insurance Companies
The so called "fiscal conservatives" in the Senate have insisted that we use only extremely wasteful private insurance companies to expand coverage to roughly 15 million Americans. Private health insurance companies have a terrible track record compared to public health insurance programs. Public programs, like Medicare, are able to provide high-quality care much more cost effectively. Because of the demands of "centrist fiscal conservatives," as a nation we will waste roughly $200-$350 billion to help sustain the broken private insurance system.
The CMS estimates the stronger public option considered in the House (Medicare rates plus 5% with provider opt-out) would cost 18% less than private insurance. If you remove the provider opt-out, got rid of the 5% extra payment, and added an auto-enrollment to reduce administrative cost, the price of insuring people with Medicare or a Medicare-like public program would probably be between 25%-30% less than private insurance. Even the insurance industry-owned Lewin Group determined that a robust public option, which would, in effect, be Medicare buy-in, would cost roughly 30% less than covering someone with private insurance.
The Senate bill will spend $447 billion and the House bill will spend $602 billion on affordability tax credits for the new exchange. Since the tax credits are structured to cover all the costs over a set percentage of people's income, a small reduction in total premiums would translate to a large reduction in government spending. For example, by reducing premiums 30%, people making between 350-400% of FPL will probably no longer need any affordability tax credits.
Simply creating a public health insurance program based on Medicare for people to buy into, instead of the new exchange, would cost roughly between $200-$350 billion less. For a faction of the cost to the government, we could provide the same number of people with the small quality of health insurance. Despite the best efforts of progressives to defend the American taxpayer from wasteful spending, so called "fiscal consevratives" have insisted on wasting hundreds of billions by only using extremely expensive private insurance companies. There is nothing "centrist" about demanding the government funnel hundreds of billions to--and force millions of Americans to buy a product from--the extremely broken but politically well-connected health insurance industry.
The CMS estimates the stronger public option considered in the House (Medicare rates plus 5% with provider opt-out) would cost 18% less than private insurance. If you remove the provider opt-out, got rid of the 5% extra payment, and added an auto-enrollment to reduce administrative cost, the price of insuring people with Medicare or a Medicare-like public program would probably be between 25%-30% less than private insurance. Even the insurance industry-owned Lewin Group determined that a robust public option, which would, in effect, be Medicare buy-in, would cost roughly 30% less than covering someone with private insurance.
The Senate bill will spend $447 billion and the House bill will spend $602 billion on affordability tax credits for the new exchange. Since the tax credits are structured to cover all the costs over a set percentage of people's income, a small reduction in total premiums would translate to a large reduction in government spending. For example, by reducing premiums 30%, people making between 350-400% of FPL will probably no longer need any affordability tax credits.
Simply creating a public health insurance program based on Medicare for people to buy into, instead of the new exchange, would cost roughly between $200-$350 billion less. For a faction of the cost to the government, we could provide the same number of people with the small quality of health insurance. Despite the best efforts of progressives to defend the American taxpayer from wasteful spending, so called "fiscal consevratives" have insisted on wasting hundreds of billions by only using extremely expensive private insurance companies. There is nothing "centrist" about demanding the government funnel hundreds of billions to--and force millions of Americans to buy a product from--the extremely broken but politically well-connected health insurance industry.
The Time To Fix The Dysfunctional Senate Is Now!
I would like to tip my hat to Ezra Klein for using the weekend to put out a whole series of articles addressing just how broken and dysfunctional our Congress has become. It is an issue that never seems to get enough attention but underlines almost every problem with our current government. He does interviews with Sen. Jeff Merkley, Sen. Tom Harkin, SEIU President Andy Stern, and UCLA professor Barbara Sinclair. The abuse of the filibuster has completely broken our government.
The filibuster has morphed dramatically over the years. For the first few years of the Republic, a filibuster was in impossible in the Senate. Even when it was “technically” possible, the filibuster was not once used for the first several decades. Eventually, the filibuster began to be used with no way to stop it. To solve the problem, the Senate added a 2/3 cloture rule of those voting. The rule went through several changes until we got the current 3/5 of sworn-in senators requirement in 1975. Throughout most of its history, the filibuster was a extremely rare tactic used by the minority party. Now its abuse has effectively ruined the Senate by imposing a defacto 60-vote requirement for anything to move.
The one issue where I strongly disagree with Klein is in his, “After health-care reform, Senate reform” article. Effectively what he is saying is that our effort on health care reform has been ruined by the terrible unconstitutional rules crippling our Senate, but we should still reward this behavior by pushing to pass the bill anyway. Despite attacking the filibuster, Klein is nevertheless enabling it by endorsing the broken legislation it produces.
To paraphrase Rahm Emanuel, you should never let a good crisis go to waste--and what you have is a great crisis of Senate rules on the issue of health care reform. Some of the most popular provisions (public option, repeal of anti-trust exemption) have majority support in the Senate, but not super-majority 60-vote support. An institution like the Senate will not change without a serious crisis, and now seems like a great time to force a resolution on the matter.
By effectively saying “it's ok if the filibuster ruins another important bill this time, but we really should think about fixing this in the future,” you take all the wind out of the push for Senate reform. After this bill is passed nothing else controversial will be addressed until the next election. Without the destructive power of the filibuster in everyone's face every day, the push for Senate rules reform will again fade from the media's consciousness. The Senate will not change if we ask politely. It needs to be dragged kicking and screaming to the reform.
If I could, I would gladly trade the failure of this Senate health care reform bill for eliminating the filibuster, once and for all. I know without the dysfunctional Senate ruining everything, the health care reform bill we would eventually get would be dramatically better. Any health care reform bill passed with a constitutional simple majority vote in 2010 or 2012, would probably be dramatically better than this current bill, and start helping Americans even sooner (before 2014). People with power (Joe Lieberman, Ben Nelson, Mary Landrieu, Blanche Lincoln have all been given unprecedented power because of the abuse of the filibuster) will not just give it up without a fight. You need to push, push, and push some more until they are so backed into a corner, they have no other option but restore the constitution in the Senate. If you refuse to push now, when will you get a better chance?
The filibuster has morphed dramatically over the years. For the first few years of the Republic, a filibuster was in impossible in the Senate. Even when it was “technically” possible, the filibuster was not once used for the first several decades. Eventually, the filibuster began to be used with no way to stop it. To solve the problem, the Senate added a 2/3 cloture rule of those voting. The rule went through several changes until we got the current 3/5 of sworn-in senators requirement in 1975. Throughout most of its history, the filibuster was a extremely rare tactic used by the minority party. Now its abuse has effectively ruined the Senate by imposing a defacto 60-vote requirement for anything to move.
The one issue where I strongly disagree with Klein is in his, “After health-care reform, Senate reform” article. Effectively what he is saying is that our effort on health care reform has been ruined by the terrible unconstitutional rules crippling our Senate, but we should still reward this behavior by pushing to pass the bill anyway. Despite attacking the filibuster, Klein is nevertheless enabling it by endorsing the broken legislation it produces.
To paraphrase Rahm Emanuel, you should never let a good crisis go to waste--and what you have is a great crisis of Senate rules on the issue of health care reform. Some of the most popular provisions (public option, repeal of anti-trust exemption) have majority support in the Senate, but not super-majority 60-vote support. An institution like the Senate will not change without a serious crisis, and now seems like a great time to force a resolution on the matter.
By effectively saying “it's ok if the filibuster ruins another important bill this time, but we really should think about fixing this in the future,” you take all the wind out of the push for Senate reform. After this bill is passed nothing else controversial will be addressed until the next election. Without the destructive power of the filibuster in everyone's face every day, the push for Senate rules reform will again fade from the media's consciousness. The Senate will not change if we ask politely. It needs to be dragged kicking and screaming to the reform.
If I could, I would gladly trade the failure of this Senate health care reform bill for eliminating the filibuster, once and for all. I know without the dysfunctional Senate ruining everything, the health care reform bill we would eventually get would be dramatically better. Any health care reform bill passed with a constitutional simple majority vote in 2010 or 2012, would probably be dramatically better than this current bill, and start helping Americans even sooner (before 2014). People with power (Joe Lieberman, Ben Nelson, Mary Landrieu, Blanche Lincoln have all been given unprecedented power because of the abuse of the filibuster) will not just give it up without a fight. You need to push, push, and push some more until they are so backed into a corner, they have no other option but restore the constitution in the Senate. If you refuse to push now, when will you get a better chance?
The Time To Fix The Dysfunctional Senate Is Now!
I would like to tip my hat to Ezra Klein for using the weekend to put out a whole series of articles addressing just how broken and dysfunctional our Congress has become. It is an issue that never seems to get enough attention but underlines almost every problem with our current government. He does interviews with Sen. Jeff Merkley, Sen. Tom Harkin, SEIU President Andy Stern, and UCLA professor Barbara Sinclair. The abuse of the filibuster has completely broken our government.
The filibuster has morphed dramatically over the years. For the first few years of the Republic, a filibuster was in impossible in the Senate. Even when it was “technically” possible, the filibuster was not once used for the first several decades. Eventually, the filibuster began to be used with no way to stop it. To solve the problem, the Senate added a 2/3 cloture rule of those voting. The rule went through several changes until we got the current 3/5 of sworn-in senators requirement in 1975. Throughout most of its history, the filibuster was a extremely rare tactic used by the minority party. Now its abuse has effectively ruined the Senate by imposing a defacto 60-vote requirement for anything to move.
The one issue where I strongly disagree with Klein is in his, “After health-care reform, Senate reform” article. Effectively what he is saying is that our effort on health care reform has been ruined by the terrible unconstitutional rules crippling our Senate, but we should still reward this behavior by pushing to pass the bill anyway. Despite attacking the filibuster, Klein is nevertheless enabling it by endorsing the broken legislation it produces.
To paraphrase Rahm Emanuel, you should never let a good crisis go to waste--and what you have is a great crisis of Senate rules on the issue of health care reform. Some of the most popular provisions (public option, repeal of anti-trust exemption) have majority support in the Senate, but not super-majority 60-vote support. An institution like the Senate will not change without a serious crisis, and now seems like a great time to force a resolution on the matter.
By effectively saying “it's ok if the filibuster ruins another important bill this time, but we really should think about fixing this in the future,” you take all the wind out of the push for Senate reform. After this bill is passed nothing else controversial will be addressed until the next election. Without the destructive power of the filibuster in everyone's face every day, the push for Senate rules reform will again fade from the media's consciousness. The Senate will not change if we ask politely. It needs to be dragged kicking and screaming to the reform.
If I could, I would gladly trade the failure of this Senate health care reform bill for eliminating the filibuster, once and for all. I know without the dysfunctional Senate ruining everything, the health care reform bill we would eventually get would be dramatically better. Any health care reform bill passed with a constitutional simple majority vote in 2010 or 2012, would probably be dramatically better than this current bill, and start helping Americans even sooner (before 2014). People with power (Joe Lieberman, Ben Nelson, Mary Landrieu, Blanche Lincoln have all been given unprecedented power because of the abuse of the filibuster) will not just give it up without a fight. You need to push, push, and push some more until they are so backed into a corner, they have no other option but restore the constitution in the Senate. If you refuse to push now, when will you get a better chance?
The filibuster has morphed dramatically over the years. For the first few years of the Republic, a filibuster was in impossible in the Senate. Even when it was “technically” possible, the filibuster was not once used for the first several decades. Eventually, the filibuster began to be used with no way to stop it. To solve the problem, the Senate added a 2/3 cloture rule of those voting. The rule went through several changes until we got the current 3/5 of sworn-in senators requirement in 1975. Throughout most of its history, the filibuster was a extremely rare tactic used by the minority party. Now its abuse has effectively ruined the Senate by imposing a defacto 60-vote requirement for anything to move.
The one issue where I strongly disagree with Klein is in his, “After health-care reform, Senate reform” article. Effectively what he is saying is that our effort on health care reform has been ruined by the terrible unconstitutional rules crippling our Senate, but we should still reward this behavior by pushing to pass the bill anyway. Despite attacking the filibuster, Klein is nevertheless enabling it by endorsing the broken legislation it produces.
To paraphrase Rahm Emanuel, you should never let a good crisis go to waste--and what you have is a great crisis of Senate rules on the issue of health care reform. Some of the most popular provisions (public option, repeal of anti-trust exemption) have majority support in the Senate, but not super-majority 60-vote support. An institution like the Senate will not change without a serious crisis, and now seems like a great time to force a resolution on the matter.
By effectively saying “it's ok if the filibuster ruins another important bill this time, but we really should think about fixing this in the future,” you take all the wind out of the push for Senate reform. After this bill is passed nothing else controversial will be addressed until the next election. Without the destructive power of the filibuster in everyone's face every day, the push for Senate rules reform will again fade from the media's consciousness. The Senate will not change if we ask politely. It needs to be dragged kicking and screaming to the reform.
If I could, I would gladly trade the failure of this Senate health care reform bill for eliminating the filibuster, once and for all. I know without the dysfunctional Senate ruining everything, the health care reform bill we would eventually get would be dramatically better. Any health care reform bill passed with a constitutional simple majority vote in 2010 or 2012, would probably be dramatically better than this current bill, and start helping Americans even sooner (before 2014). People with power (Joe Lieberman, Ben Nelson, Mary Landrieu, Blanche Lincoln have all been given unprecedented power because of the abuse of the filibuster) will not just give it up without a fight. You need to push, push, and push some more until they are so backed into a corner, they have no other option but restore the constitution in the Senate. If you refuse to push now, when will you get a better chance?
What Is A Loan Equal To The GDP Of A Mid-Size Country Between Friends?
The Treasury had originally given both Fannie Mae and Freddie Mac a $200 billion line of credit. Even though neither company had come close reaching their current credit limit, the Obama administration had been thinking of doubling that line of credit to $800 billion total ($400 billion each). Instead of doubling the limit, the Obama administration announced late Christmas Eve that the Treasury department would give both companies an unlimited line of credit. By removing any cap on the potential loan before the end of the year, Obama was able to avoid getting Congressional approval for the decision.
We have been hearing a lot of big numbers lately due to the bailouts. It is important to put into context just how massive this loan to Fannie Mae and Freddie Mac really is (and without Congressional approval!). So consider this, the GDP of the following countries are:
South Korea – $929 billion
Netherlands – $860 billion
Turkey – $794 billion
Poland – $526 billion
Indonesia – $514 billion
Saudi Arabia – $468 billion
Norway – $450 billion
Greece – $357 billion
Argentina – $328 billion
(source World Bank 2008)
President Obama, without congressional oversight or approval, decided to give these two companies a loan equal to the entire economic output of most mid-size countries. You may agree or disagree with this move. You may think it is "necessary" because of how completely broken our Congress is. Regardless, it is important to realize the sheer size of the numbers being dicussed.
We have been hearing a lot of big numbers lately due to the bailouts. It is important to put into context just how massive this loan to Fannie Mae and Freddie Mac really is (and without Congressional approval!). So consider this, the GDP of the following countries are:
South Korea – $929 billion
Netherlands – $860 billion
Turkey – $794 billion
Poland – $526 billion
Indonesia – $514 billion
Saudi Arabia – $468 billion
Norway – $450 billion
Greece – $357 billion
Argentina – $328 billion
(source World Bank 2008)
President Obama, without congressional oversight or approval, decided to give these two companies a loan equal to the entire economic output of most mid-size countries. You may agree or disagree with this move. You may think it is "necessary" because of how completely broken our Congress is. Regardless, it is important to realize the sheer size of the numbers being dicussed.
A Big Win For PhRMA, Health Insurance Companies, Obama, Reid, Nelson, Lincoln, Lieberman; A Big Loss For The American People And Progressives
Today's vote in the Senate to pass their health care reform bill was a big win for many people. It was a big win for the drug companies, the biologics industry, the hospital companies, and the for-profit health insurance corporations. They will all get billions of government dollars piled on to their ledgers, and and millions of Americans now forced to buy their products. The vote was also a huge win for the lobbyists who just saw their profits jump thanks to this great opportunity to show their clients just how powerful their hold on Washington really is.
This vote was also a political win. It was a big deal for politicians--like Barack Obama, Max Baucus, Rahm Emanuel, and Harry Reid--who cared more about putting up a “W” on the scoreboard than about the policy. It was also a big day for senators like Blanche Lincoln, Mary Landrieu, Ben Nelson, and Joe Lieberman. The incredibly broken rules of the Senate gave them an absurd amount of anti-constitutional power that allowed them to hold reform hostage for pork and industry favors.
It was loss for the country. Our broken health care system will remain broken and costs will continue to rise at an alarming rate. Things like drug re-importation and a robust public option, which would have helped bring down prices for millions of Americans, were stripped from the bill at the request of powerful industry lobbyists.
It was also a big loss for the progressive movement. We were out-gunned by industry lobbyists, and many of our movement “allies” failed us. A woman's right to choose was thrown under the bus just to get something passed. The supposed “progressives” in the Senate refused to go all-out and use every tool to achieve the most progressive reform. Lawrence O'Donnell is right, most importantly, this bill will give liberalism a very bad name.
This is not progressive reform. This is a perverse Democratic version of Reagan style trickle down economics. Hundreds of billions will be given to poorly regulated private health insurance companies in the hope that they spend roughly 80% of that money on actually providing people with health care. It forces millions of people to buy very expensive insurance that they cannot afford to get actual health care, so that Democrats can proudly say millions more people are “covered.” Private health insurance companies are what have ruined our current system and are dramatically less efficient than public insurance programs, yet Democrats will use them almost exclusively. It is a massive reward for a history of terrible performance. Instead of reining in the insurance companies, it only enriches, empowers, and entrenches them further. The only "check" on the industry will be new regulations, but with extremely weak to practically non-existent enforcement, it is basically no check at all.
This program is not even a good foundation on which to build later reform. It will be a wasteful, expensive, and probably unpopular program for only a small subset of lower income Americans. That is a recipe for making it a target for cuts by conservatives, not expansion by progressives. This bill could easily discredit the move for true universal health care by being such a poorly designed failure.
There is some good in the bill, but not much. It will put roughly 15 million more people on Medicaid/CHIP, but mainly because the private insurance companies did not even want to cover these poor people. It will put some needed regulations on the books, but does not create the strong enforcement mechanisms to make them a reality. But these improvements come at a huge cost. There is a poorly designed tax that will cause many people's insurance to get worse, a rollback of women's reproductive rights, and a mandate forcing people to buy low quality, expensive insurance for unregulated private insurance companies. This bill will make the enemies of reform even stronger for the next fight.
The only silver lining is that we live in a bicameral constitutional democracy regardless of how much the Washington media refuses to acknowledge this basic fact. The House has passed a better bill that contains actual reform. If progressive House members would use their power to stop any bill that doesn't contain real reform from becoming law, we could get actual reform. They need to stop enabling the Senate transformation of our government into a broken, unicameral, non-representative, super-majority plutocracy.
This Senate bill is not a step forward for progressivism, it is a step backward. It is part of the transformation of all-important public social responsibilities into a privatized profit- making machine that lives off of government money won through a corrupt cycle of lobbying, campaign donations, and corporate giveaways. This bill does not advance the progressive movement, it just uses its name and mantras to justify a huge industrial bailout. In the long run, I see this bill as discrediting the progressive movement, not advancing it. This problem is not that this bill is just small reform, it is unworkable reform doomed to fail.
This vote was also a political win. It was a big deal for politicians--like Barack Obama, Max Baucus, Rahm Emanuel, and Harry Reid--who cared more about putting up a “W” on the scoreboard than about the policy. It was also a big day for senators like Blanche Lincoln, Mary Landrieu, Ben Nelson, and Joe Lieberman. The incredibly broken rules of the Senate gave them an absurd amount of anti-constitutional power that allowed them to hold reform hostage for pork and industry favors.
It was loss for the country. Our broken health care system will remain broken and costs will continue to rise at an alarming rate. Things like drug re-importation and a robust public option, which would have helped bring down prices for millions of Americans, were stripped from the bill at the request of powerful industry lobbyists.
It was also a big loss for the progressive movement. We were out-gunned by industry lobbyists, and many of our movement “allies” failed us. A woman's right to choose was thrown under the bus just to get something passed. The supposed “progressives” in the Senate refused to go all-out and use every tool to achieve the most progressive reform. Lawrence O'Donnell is right, most importantly, this bill will give liberalism a very bad name.
This is not progressive reform. This is a perverse Democratic version of Reagan style trickle down economics. Hundreds of billions will be given to poorly regulated private health insurance companies in the hope that they spend roughly 80% of that money on actually providing people with health care. It forces millions of people to buy very expensive insurance that they cannot afford to get actual health care, so that Democrats can proudly say millions more people are “covered.” Private health insurance companies are what have ruined our current system and are dramatically less efficient than public insurance programs, yet Democrats will use them almost exclusively. It is a massive reward for a history of terrible performance. Instead of reining in the insurance companies, it only enriches, empowers, and entrenches them further. The only "check" on the industry will be new regulations, but with extremely weak to practically non-existent enforcement, it is basically no check at all.
This program is not even a good foundation on which to build later reform. It will be a wasteful, expensive, and probably unpopular program for only a small subset of lower income Americans. That is a recipe for making it a target for cuts by conservatives, not expansion by progressives. This bill could easily discredit the move for true universal health care by being such a poorly designed failure.
There is some good in the bill, but not much. It will put roughly 15 million more people on Medicaid/CHIP, but mainly because the private insurance companies did not even want to cover these poor people. It will put some needed regulations on the books, but does not create the strong enforcement mechanisms to make them a reality. But these improvements come at a huge cost. There is a poorly designed tax that will cause many people's insurance to get worse, a rollback of women's reproductive rights, and a mandate forcing people to buy low quality, expensive insurance for unregulated private insurance companies. This bill will make the enemies of reform even stronger for the next fight.
The only silver lining is that we live in a bicameral constitutional democracy regardless of how much the Washington media refuses to acknowledge this basic fact. The House has passed a better bill that contains actual reform. If progressive House members would use their power to stop any bill that doesn't contain real reform from becoming law, we could get actual reform. They need to stop enabling the Senate transformation of our government into a broken, unicameral, non-representative, super-majority plutocracy.
This Senate bill is not a step forward for progressivism, it is a step backward. It is part of the transformation of all-important public social responsibilities into a privatized profit- making machine that lives off of government money won through a corrupt cycle of lobbying, campaign donations, and corporate giveaways. This bill does not advance the progressive movement, it just uses its name and mantras to justify a huge industrial bailout. In the long run, I see this bill as discrediting the progressive movement, not advancing it. This problem is not that this bill is just small reform, it is unworkable reform doomed to fail.
16 More Ways To Fix A Very Bad Senate Bill
Now that the first (although least controversial of my ideas) to fix the terrible Senate bill appears likely to be adopted in the conference committee, now is no time to let up. I see their one improvement, and raise them another 15 changes that need to be made. Here are 16 more ideas to add to my original list of 35 ideas:
The more I think about the Senate health care bill, the more glaring failures I see in its design--but pointing out that there is a problem is always the first step towards fixing any problem. Maybe if supposed "liberal/progressive" media spends more time drawing attention to all the failings in the current Senate bill, and less time telling the grassroots they need to just accept any awful bill, the bill would not be so terrible.
- Extend everyone's COBRA coverage until the reform kicks in (like in the House bill).
- Better define the term "medical loss ratio" in the bill to prevent insurers from gaming the regulation.
- Give the IRS power and duty to enforce insurance companies' MLR regulation.
- Remove the six-month wait for the temporary high-risk pools for people with pre-existing conditions. If you can't get affordable health insurance, it is immoral that the bill makes you go uninsured for six months before you get care.
- Set up the exchange and all corresponding regulations for small business as soon as possible (a few months). They delayed the exchange because the regulations in the individual market require the expensive affordability tax credits. The small business market will not get expensive affordability tax credits, so there is no reason not to start the exchange just for the small group market as soon as possible.
- Let insurers in the new exchange use a reimbursement rate based on Medicare plus some percent. (This idea from Jacob Hacker would have similar cost controlling effects as my previous suggestion of having the exchange commissioner force all insurers using PPO's to negotiate one standard provider reimbursement rate.)
- Use the OPM exchange to replicate something similar to the Swiss or German system. (Only allow only new CO-OP plans to take part. Mandate a 93% MLR, precisely define benefit packages, and have them collectively pool their negotiating power with providers and manufacturers. Make all co-ops on the OPM exchange share provider networks, reimbursement rates, and forms for PPOs plans or out-of-network charges. Create a robust internal risk adjuster and give all plans in the OPM exchange the power to reimburse at Medicare rates plus 10% for the first several years while the co-ops and OPM exchange gets off the ground.
- Allow people below 190% of FPL, but who are not poor enough to qualify for Medicaid, to buy in to the program.
- At least allow people who were on Medicaid but have incomes that increase just slightly above the Medicaid qualification cut off to “buy in” to Medicaid so that they can keep a seamless coverage despite minor fluctuations in income.
- Fully Federalize the whole Medicaid program.
- Provide serious special benefits to insurance plans that score very high on precisely defined sets of metrics (MLR, cost effectiveness, consumer reviews, survival rates, speed of claim reimbursement, easy of appeal process, customer retention, etc.)
- Encourage states and local governments to find a way to merge their state employer insurance exchanges with the new exchange as long as it can be done in a way that does not reduce the quality or increase the cost of coverage for state employees.
- Encourage community health care centers to work together to create new fully integrated, cost-effective health care plans to cover individuals in Medicaid, the new “basic health program,” or on the new exchange. (like the Community Health Network of Connecticut)
- Have all insurance plans that provide coverage for young children have zero cost sharing for the health care of the child.
- At least make all health insurance plans covering children have extremely low co-pays, deductibles, and out-of-pocket limits for the coverage of the child.
- Have all young children in the country without insurance coverage, regardless of legal status, automatically enrolled in some form low out-of-pocket public health care program. (No child on US soil or anywhere else on Earth should ever die due to lack of access basic affordable health care.)
The more I think about the Senate health care bill, the more glaring failures I see in its design--but pointing out that there is a problem is always the first step towards fixing any problem. Maybe if supposed "liberal/progressive" media spends more time drawing attention to all the failings in the current Senate bill, and less time telling the grassroots they need to just accept any awful bill, the bill would not be so terrible.
Don’t Blame Jane for Bad Health Reform and Broken Government
Jane Hamsher does not support the Senate health care reform bill. No one should support the Senate health care reform bill because it is, frankly, a very bad bill. It has no real checks on the health insurance industry, and is an extremely expensive and wasteful way to expand coverage. Fortunately, our government is a bicameral constitutional democracy, and the other co-equal branch of Congress produced a much better bill that Jane does support, and is trying to make law.
Is the House bill perfect? No, it is still much worse than the ideal health care system. There are even sections of the Senate bill which are better than the House bill. (I have explained most of this sections in excruciating detail as part of my “what the Senate bill does better” series.)
All Jane is demanding is that our government follow the Constitution and do its job. She is now demanding Congress work like it was designed to by producing in conference the best legislation possible, taking the best elements from both bills. She expects House progressives to use their power to stop what has become a disgusting trampling of our basic rule of law by voting against any conference report which is not real reform. For making this “radical” demand that Congress be held to the incredibly high standard of simply following the Constitution, Jane has been attacked vigorously.
This 60-vote threshold is a myth. It was impossible to even filibuster in the Senate for the first several decades, and basically never happened in the first hundred years of our nation. The rules for cloture have been changed repeatedly over the decades. Requiring 60 votes (3/5 of all sworn in members) for cloture is a relatively new standard, one which has broken our system. Most importantly, there is nothing making the Democratic senators follow the 60 vote rule; if they really wanted to, they could get rid of it tomorrow, like Bill Frist almost did a few years ago.
Much of the supposed liberal, progressive, and/or establishment media has occasionally decided to give some lip service to the need to get rid of the filibuster, but they claim it must only be done with quiet, “inside voices,” and by politely asking the senators to maybe think about changing a made-up, anti-Constitutional rule that is destroying the country. It is only lip service because, at the same time, they are loudly applauding Harry Reid for figuring out a way to completely gut health care reform to get those 60 votes.
Even as they muse about the filibuster, they are endorsing the terrible bill it produced, and telling all progressives to be thankful for their crumbs. This makes them enablers for a broken system, and what they are enabling is the destruction of our nation. Our health care costs are killing us, our lack of good banking regulation is setting us up for another great financial collapse, and global warming is threatening the long-term success of not only our country but our species. None of these major problems will ever be solved as long as we have this anti-constitutional 60-vote threshold.
Things will never get better unless we demand they get better. The veal pen that has enabled this terrible bill every step of the way did not just help kill real health care reform, but any hope of ever finding real solutions to the serious problems we face. By saying you support this bill, you are indirectly endorsing the idea that the Constitution can be violated and Ben Nelson/Joe Lieberman/Blanche Lincoln should get to be all-powerful. Like her methods or not, Jane has a strategy, and she is trying to use it to help fix our health care system—and our government.
Congress will not change the way it operates without a crisis. If we can't make choosing between the overwhelming will of the American people or choosing their stupid Senate privileges that protect the health insurance companies a crisis, I can't imagine any other route to fixing this rotten rule that has ruined the Senate. The time for politely musing about possibly, eventually asking senators to maybe fix our broken system of government has long passed. This is the time to demand better. This is the time to push Congress to the breaking point. Push them until they are so backed into a corner they have no other choice but to address the underlying problems ruining our government. The second that some “liberals” in the media declared this bill “good enough,” they stopped pushing and starting defending our broken system as also “good enough.”
Jane Hamsher did not ruin health care reform. The veal pen who signaled all along that they would cheer even expensive, corrupt crumbs did that. If you only demand crumbs you will only ever get crumbs. The supposed “progressive” senators and House members who decide to defend the broken rules of Congress instead of doing everything possible to get the best bill possible are even more to blame.
You are angry about health care reform right now, and you should be, but I don't see why you are angry with Jane. She promised from the very beginning to constantly fight for the best health care reform bill possible, and never to accept a bill that is not real reform. That is what she promised, and that is what she is doing. It is Senators like Tom Harkin, Harry Reid, Dick Durbin, Chuck Schumer, Bernie Sanders, etc., and the 65 members of the progressive caucus who promised to do everything possible to fight for a public option that you should be angry at. They are the ones who broke their promise, and they are the ones who refused to use every tool (reconciliation, nuclear option, threats to remove chairmanships, forcing a real filibuster, attaching reform measures to large defense appropriation bills, etc.) at their disposal to deliver on real reform. They are the ones who actually have power to do something in Congress. So, why is anyone angry at Jane?
Is the House bill perfect? No, it is still much worse than the ideal health care system. There are even sections of the Senate bill which are better than the House bill. (I have explained most of this sections in excruciating detail as part of my “what the Senate bill does better” series.)
All Jane is demanding is that our government follow the Constitution and do its job. She is now demanding Congress work like it was designed to by producing in conference the best legislation possible, taking the best elements from both bills. She expects House progressives to use their power to stop what has become a disgusting trampling of our basic rule of law by voting against any conference report which is not real reform. For making this “radical” demand that Congress be held to the incredibly high standard of simply following the Constitution, Jane has been attacked vigorously.
This 60-vote threshold is a myth. It was impossible to even filibuster in the Senate for the first several decades, and basically never happened in the first hundred years of our nation. The rules for cloture have been changed repeatedly over the decades. Requiring 60 votes (3/5 of all sworn in members) for cloture is a relatively new standard, one which has broken our system. Most importantly, there is nothing making the Democratic senators follow the 60 vote rule; if they really wanted to, they could get rid of it tomorrow, like Bill Frist almost did a few years ago.
Much of the supposed liberal, progressive, and/or establishment media has occasionally decided to give some lip service to the need to get rid of the filibuster, but they claim it must only be done with quiet, “inside voices,” and by politely asking the senators to maybe think about changing a made-up, anti-Constitutional rule that is destroying the country. It is only lip service because, at the same time, they are loudly applauding Harry Reid for figuring out a way to completely gut health care reform to get those 60 votes.
Even as they muse about the filibuster, they are endorsing the terrible bill it produced, and telling all progressives to be thankful for their crumbs. This makes them enablers for a broken system, and what they are enabling is the destruction of our nation. Our health care costs are killing us, our lack of good banking regulation is setting us up for another great financial collapse, and global warming is threatening the long-term success of not only our country but our species. None of these major problems will ever be solved as long as we have this anti-constitutional 60-vote threshold.
Things will never get better unless we demand they get better. The veal pen that has enabled this terrible bill every step of the way did not just help kill real health care reform, but any hope of ever finding real solutions to the serious problems we face. By saying you support this bill, you are indirectly endorsing the idea that the Constitution can be violated and Ben Nelson/Joe Lieberman/Blanche Lincoln should get to be all-powerful. Like her methods or not, Jane has a strategy, and she is trying to use it to help fix our health care system—and our government.
Congress will not change the way it operates without a crisis. If we can't make choosing between the overwhelming will of the American people or choosing their stupid Senate privileges that protect the health insurance companies a crisis, I can't imagine any other route to fixing this rotten rule that has ruined the Senate. The time for politely musing about possibly, eventually asking senators to maybe fix our broken system of government has long passed. This is the time to demand better. This is the time to push Congress to the breaking point. Push them until they are so backed into a corner they have no other choice but to address the underlying problems ruining our government. The second that some “liberals” in the media declared this bill “good enough,” they stopped pushing and starting defending our broken system as also “good enough.”
Jane Hamsher did not ruin health care reform. The veal pen who signaled all along that they would cheer even expensive, corrupt crumbs did that. If you only demand crumbs you will only ever get crumbs. The supposed “progressive” senators and House members who decide to defend the broken rules of Congress instead of doing everything possible to get the best bill possible are even more to blame.
You are angry about health care reform right now, and you should be, but I don't see why you are angry with Jane. She promised from the very beginning to constantly fight for the best health care reform bill possible, and never to accept a bill that is not real reform. That is what she promised, and that is what she is doing. It is Senators like Tom Harkin, Harry Reid, Dick Durbin, Chuck Schumer, Bernie Sanders, etc., and the 65 members of the progressive caucus who promised to do everything possible to fight for a public option that you should be angry at. They are the ones who broke their promise, and they are the ones who refused to use every tool (reconciliation, nuclear option, threats to remove chairmanships, forcing a real filibuster, attaching reform measures to large defense appropriation bills, etc.) at their disposal to deliver on real reform. They are the ones who actually have power to do something in Congress. So, why is anyone angry at Jane?
Senate Bill Still Leaves Health Insurance Companies Unchecked
The Senate bill removed the public option. The public option would have been a benchmark by which to judge the private insurance companies. It would have served as a check on the private insurance companies.
With the public option gone, the only other check left on the for-profit private insurance industry is regulation. Can under-enforced regulations really serve as a check on a very wealthy and powerful industry? The answer is "no," and that is the pitfall of the Senate bill.
The Senate bill leaves enforcement of regulation up to the same state insurance commissioners that have failed us so far. The bill does not even remove the anti-trust exemption for health insurance companies.
Some state insurance commissioners are overly friendly to the insurance industry. Even Max Baucus, who wrote the bill, admits he is "not sure" about trusting the state insurance commissioners. The few state insurance commissioners who try to take on the insurance companies are often hopelessly out-gunned. The California insurance commissioner's office is one of the best in the country, but was forced to admit it did not have the resources needed to stand up to the biggest insurance companies.
Is there is anyone who can honestly tell me how this bill will actually work to enforce these regulations around the entire country? Not the nice sounding bullet points, but a detailed analysis how our unreformed, broken, state-based insurance regulation enforcement mechanisms will ever be able to handle their expanded job functions. If there is, I have not seen it. Regulations un-enforced are just like no regulations at all.
The Senate bill puts into place some very nice-sounding regulations, but does not add the super powerful policing force needed to make them a reality. The old dirty tricks we have come to hate from the private insurance companies may mostly disappear, but only because they will morph into brand new ways to game the system.
The most critical failing of the Senate bill is that it still leaves the private insurance companies unchecked. They will not face competition from a public option, there will not be a truly robust risk adjustment mechanism to de-incentivize cherry picking, and the state insurance commissioners meant to enforce the new regulations will lack the will and/or the funding to take them on. Rules without a policeman strong enough to enforce them are just empty promises.
The House bill, on the other hand, had three important checks on the health insurance industry. It had the public option, a national regulatory framework, and a repeal of their anti-trust exemption. The Federal government is the only body possibly big enough to police the largest for-profit insurance companies.
If Democrats pass a “reform” bill (like the Senate bill) that lacks any real checks on private insurance--on the industry from which people will be forced to buy insurance--it will be a disaster. Democrats created this “reform,” and they will be forced to own it--along with every new trick the private insurance companies invent to abuse their customers. If you are going to give Americans a box labeled "health care reform" for Christmas, it better actually have real reform inside.
With the public option gone, the only other check left on the for-profit private insurance industry is regulation. Can under-enforced regulations really serve as a check on a very wealthy and powerful industry? The answer is "no," and that is the pitfall of the Senate bill.
The Senate bill leaves enforcement of regulation up to the same state insurance commissioners that have failed us so far. The bill does not even remove the anti-trust exemption for health insurance companies.
Some state insurance commissioners are overly friendly to the insurance industry. Even Max Baucus, who wrote the bill, admits he is "not sure" about trusting the state insurance commissioners. The few state insurance commissioners who try to take on the insurance companies are often hopelessly out-gunned. The California insurance commissioner's office is one of the best in the country, but was forced to admit it did not have the resources needed to stand up to the biggest insurance companies.
Is there is anyone who can honestly tell me how this bill will actually work to enforce these regulations around the entire country? Not the nice sounding bullet points, but a detailed analysis how our unreformed, broken, state-based insurance regulation enforcement mechanisms will ever be able to handle their expanded job functions. If there is, I have not seen it. Regulations un-enforced are just like no regulations at all.
The Senate bill puts into place some very nice-sounding regulations, but does not add the super powerful policing force needed to make them a reality. The old dirty tricks we have come to hate from the private insurance companies may mostly disappear, but only because they will morph into brand new ways to game the system.
The most critical failing of the Senate bill is that it still leaves the private insurance companies unchecked. They will not face competition from a public option, there will not be a truly robust risk adjustment mechanism to de-incentivize cherry picking, and the state insurance commissioners meant to enforce the new regulations will lack the will and/or the funding to take them on. Rules without a policeman strong enough to enforce them are just empty promises.
The House bill, on the other hand, had three important checks on the health insurance industry. It had the public option, a national regulatory framework, and a repeal of their anti-trust exemption. The Federal government is the only body possibly big enough to police the largest for-profit insurance companies.
If Democrats pass a “reform” bill (like the Senate bill) that lacks any real checks on private insurance--on the industry from which people will be forced to buy insurance--it will be a disaster. Democrats created this “reform,” and they will be forced to own it--along with every new trick the private insurance companies invent to abuse their customers. If you are going to give Americans a box labeled "health care reform" for Christmas, it better actually have real reform inside.
Obama Thinks Lying To The American People Is The Best Strategy
Instead of honestly admitting that the bill working its way through Congress does not fully meet his campaign promises, Obama has decided the proper strategy is to just lie to the American people:
This is just a set of bald-faced lies, as I demonstrated in detail earlier this week. The public option was clearly part of his campaign plan. His campaign plan also promised a national exchange, drug re-importation, an employer mandate, direct Medicare drug price negotiations, to let you keep your current plan if you like it, and to bring down health care costs by $2,500 per year for a family. The Senate bill will do none of these things.
Obama did promise to not do two very important things with health care reform. He promised to not include an individual mandate and not tax employer-provided health insurance benefits. This Senate bill breaks both of those promises.
This health care reform fight already made Obama look like a weak leader and a defender of the corporate lobbyists. Now, it has also made him a liar--one who is discrediting the widely acknowledge need for much greater reform. For all the people in the “we will fix it later” crowd, please notice Obama is not on your side. He thinks this reform bill is just fine as it is.
[Obama] said the Senate legislation accomplishes "95 percent" of what he called for during his 2008 presidential campaign and in his September speech to a joint session of Congress on the need for health-care reform.
…
Obama said the public option "has become a source of ideological contention between the left and right." But, he added, "I didn't campaign on the public option."
This is just a set of bald-faced lies, as I demonstrated in detail earlier this week. The public option was clearly part of his campaign plan. His campaign plan also promised a national exchange, drug re-importation, an employer mandate, direct Medicare drug price negotiations, to let you keep your current plan if you like it, and to bring down health care costs by $2,500 per year for a family. The Senate bill will do none of these things.
Obama did promise to not do two very important things with health care reform. He promised to not include an individual mandate and not tax employer-provided health insurance benefits. This Senate bill breaks both of those promises.
This health care reform fight already made Obama look like a weak leader and a defender of the corporate lobbyists. Now, it has also made him a liar--one who is discrediting the widely acknowledge need for much greater reform. For all the people in the “we will fix it later” crowd, please notice Obama is not on your side. He thinks this reform bill is just fine as it is.
This "Big" Number Fills Me With Terror, Not With Joy
Harold Pollack ran the numbers and is very pleased that the Senate bill will eventually spend a lot of money on subsidies going to private insurance companies to make insurance affordable for the uninsured:
Harold Pollack is clearly pleased that a lot of money is being directed to help people (even if it is in a very wasteful way). On the other hand, I see this large number, and it fills me with terror. First, even as large as this number is, it is nowhere near sufficient to make quality health insurance universally affordable. Because they did not truly reform our broken health care system, the cost of expanding coverage is extremely high.
What I see when I look at that $200 billion number is a huge target for Republicans and conservative Democratic “entitlement cutters.” The subsidies only go to a small fraction of Americans who are not politically connected. I can easily imagine the already low-quality insurance on the exchange slowly being scaled back to basically nothing. I fear the Republican solution to the high cost of the program will be their same solution to all programs; Deregulation.
What progressives should really want to see is a smaller number attained by using much more cost-effective public insurance programs to expand coverage. The Senate bill is an extremely expensive expansion of very-low-quality insurance to a small group of low income Americans. That does not sound like a recipe for a workable, long-term reform program. This big number is something that should fill progressives with fear; not joy. It will only enrich the enemies of reform and be a huge target for “deficit reduction.”
As others have noted, Democrats are on the brink of enacting an imperfect but historic bill that will cover 30 million people and correct egregious defects in our current health insurance system. Fully implemented, the bill would provide about $200 billion per year down the income scale in subsidies to poor, near-poor, and working Americans.
$200 billion is a big number. It exceeds the combined total of federal spending on Food Stamps and all nutrition assistance programs, the Earned Income Tax Credit, Head Start, TANF cash payments to single mothers and their children, the Department of Housing and Urban Development, and the National Institutes of Health.
Harold Pollack is clearly pleased that a lot of money is being directed to help people (even if it is in a very wasteful way). On the other hand, I see this large number, and it fills me with terror. First, even as large as this number is, it is nowhere near sufficient to make quality health insurance universally affordable. Because they did not truly reform our broken health care system, the cost of expanding coverage is extremely high.
What I see when I look at that $200 billion number is a huge target for Republicans and conservative Democratic “entitlement cutters.” The subsidies only go to a small fraction of Americans who are not politically connected. I can easily imagine the already low-quality insurance on the exchange slowly being scaled back to basically nothing. I fear the Republican solution to the high cost of the program will be their same solution to all programs; Deregulation.
What progressives should really want to see is a smaller number attained by using much more cost-effective public insurance programs to expand coverage. The Senate bill is an extremely expensive expansion of very-low-quality insurance to a small group of low income Americans. That does not sound like a recipe for a workable, long-term reform program. This big number is something that should fill progressives with fear; not joy. It will only enrich the enemies of reform and be a huge target for “deficit reduction.”
Reforms Don't Always Magically Get Fixed Over Time
People in the "pass any bill, regardless how bad" camp often talk about “fixing it later.” They point to previous progressive change like social security, Medicare, and the civil rights legislation as proof that progressive reforms start small but grow into something better. This mantra is repeated as an article of faith, but it is not based on a true, dispassionate examination of history. For every progressive reform that slowly grew into something better, there is a counter example of reform efforts that, due to poor design, withered or died over the years.
Arianna Huffington uses the example of the badly designed “No Child Left Behind” program. It has turned into a disaster, but has remained unfixed for almost a decade. Rupert Russell, John Aravosis, and Atrios point to the example of welfare programs that were part of Johnson's Great Society. It is hard to argue welfare has become better and more progressive over the decades. The parallels between welfare and this health care reform bill (both only help a rather small group of typically lower income Americans) is something to be seriously concerned about.
There is also the example of the slow rollback of labor union rights, and, most importantly for me, banking regulations. The critical post-Great Depression banking regulations have been under assault for decades, and I think last year's financial meltdown made it clear that deregulation mania has been to the detriment of our society. With the Republican party hellbent on deregulation, I have little faith in the long-term viability of a health care system that relies solely on regulation to keep the health insurance industry honest.
Many are championing this bill as an imperfect step toward greater reform, and claim it is built on a strong foundation. Say what you will about the benefits of the bill, but I refuse to accept that funneling trillions of dollars, and forcing millions of new customers, into the private health insurance system that got us into this mess is a smart foundation.
A strong fear of mine is that this bill will only intertwine another powerful industry complex into our system of government. Like the military industrial complex, agricultural industrial complex, and now, possibly, the financial industrial complex, I fear the private health insurance industrial complex will begin feeding off the government tit and never let go. It will become another bloated industry that survives by extorting ever-greater amounts of money from the government in a vicious cycle of legalized corruption. I worry passing this bill will make it effectively impossible to ever rein in or eliminate this extremely wasteful industry. It will become another burden this country can't afford to support.
We should debate the health care bill before us with eyes wide open. We should not delude ourselves with wishful thinking or the mistaken belief that every small, imperfect attempt at progressive reform always grows into something great. Not every attempt at progressive reform in this country has kept moving forward in a linear direction. We must also fully acknowledge the terrible potential ramifications of what this bill could do. The private health insurance system is ruining our nation and making us uncompetitive in the global market place. This bill will help some Americans, but at the terrible price of greatly increasing the power of those who ruined the health care system to begin with.
This bill may be a small step forward toward better reform. It might end up a new welfare program that is slowly pared down to near uselessness over the years (and health reform is not starting from a robust place to begin with). Or by empowering the enemies of real reform, it could be the political equivalent of a starving farmer feeding his children the seed stock. It holds off the hunger for now, but, in the long term, it dooms the farmer because he has nothing left to plant. Temporary relief at the price of even greater long term trouble.
Arianna Huffington uses the example of the badly designed “No Child Left Behind” program. It has turned into a disaster, but has remained unfixed for almost a decade. Rupert Russell, John Aravosis, and Atrios point to the example of welfare programs that were part of Johnson's Great Society. It is hard to argue welfare has become better and more progressive over the decades. The parallels between welfare and this health care reform bill (both only help a rather small group of typically lower income Americans) is something to be seriously concerned about.
There is also the example of the slow rollback of labor union rights, and, most importantly for me, banking regulations. The critical post-Great Depression banking regulations have been under assault for decades, and I think last year's financial meltdown made it clear that deregulation mania has been to the detriment of our society. With the Republican party hellbent on deregulation, I have little faith in the long-term viability of a health care system that relies solely on regulation to keep the health insurance industry honest.
Many are championing this bill as an imperfect step toward greater reform, and claim it is built on a strong foundation. Say what you will about the benefits of the bill, but I refuse to accept that funneling trillions of dollars, and forcing millions of new customers, into the private health insurance system that got us into this mess is a smart foundation.
A strong fear of mine is that this bill will only intertwine another powerful industry complex into our system of government. Like the military industrial complex, agricultural industrial complex, and now, possibly, the financial industrial complex, I fear the private health insurance industrial complex will begin feeding off the government tit and never let go. It will become another bloated industry that survives by extorting ever-greater amounts of money from the government in a vicious cycle of legalized corruption. I worry passing this bill will make it effectively impossible to ever rein in or eliminate this extremely wasteful industry. It will become another burden this country can't afford to support.
We should debate the health care bill before us with eyes wide open. We should not delude ourselves with wishful thinking or the mistaken belief that every small, imperfect attempt at progressive reform always grows into something great. Not every attempt at progressive reform in this country has kept moving forward in a linear direction. We must also fully acknowledge the terrible potential ramifications of what this bill could do. The private health insurance system is ruining our nation and making us uncompetitive in the global market place. This bill will help some Americans, but at the terrible price of greatly increasing the power of those who ruined the health care system to begin with.
This bill may be a small step forward toward better reform. It might end up a new welfare program that is slowly pared down to near uselessness over the years (and health reform is not starting from a robust place to begin with). Or by empowering the enemies of real reform, it could be the political equivalent of a starving farmer feeding his children the seed stock. It holds off the hunger for now, but, in the long term, it dooms the farmer because he has nothing left to plant. Temporary relief at the price of even greater long term trouble.
Why So Angry? Nate Silver Still Wrong On Health Care Policy
Nate Silver made an incorrect statement about health care policy and he is now trying to rewrite history. In reference to removing the individual mandate he said:
There is no way that removing the individual mandate from the bill would increase the CBO score for net outlay of federal spending. There is not a single health care policy analyst who would not agree that what Silver said was completely wrong. In fact, I used the quotes from two of the biggest supporters of the individual mandate, Paul Krugman and Jonathan Gruber, to show that even they would admit that removing the individual mandate would decrease the CBO projection of net federal spending.
It should be noted that I purposely did not use analysis from economists friendly to my point of view. I selected economists Silver claimed to follow to prove that even they would tell him he was wrong. This is, perhaps, a finer point of debate technique lost on Silver, who is now trying to back track:
(Hmm. . . that sounds like a perfect description of what Nate Silver has been try to do on the issue of health care policy.)
As you can see, this statement is complete revisionist history. Silver clearly argued it would increase the CBO price tag on net federal spending, which it would not. He was using an incomplete understanding of health care policy to argue my idea of removing the individual mandate as an assurance that they will "fix it later" would be politically impossible. The truth is Olympia Snowe is opposed to the individual mandate and wants a lower CBO price tag. Removing the individual mandate could end up making it easier not harder to get votes. If he argued it would decrease the expansion of coverage, that would be a legitimate argument. That is clearly not what he was arguing, and if he had, I would have used a different rebuttal to refute the political impact of that change.
For example, 15 million of the newly covered would be in Medicaid/SCHIP. At most, dropping the individual mandate would reduce total coverage expansion to roughly 25 million instead of 31 million. The House bill expands coverage to 36 million people more cost effectively, yet no one seems to care about how many million fewer people the Senate covers. Nor does anyone seem to care that the Senate bill's lack of a real employer mandate creates a greater need to increase federal subsidies for coverage expansion. Dropping the individual mandate but strengthening the employer mandate and easing restrictions on immigrants could led to equal expansion of total coverage.
Of course, the CBO already concluded that the bill would dramatically increase average premiums in the individual market by 10-13%. That did not stop Democrats from wanting to pass the bill. If that were 15-20%, would Senate Democrats have then freaked out? Maybe, maybe not (I don't know). The recent addition of a ban on annual limits will increase average premiums, but, so far, I have seen no Democrats turn against the deal. It seems the general tone of the debate is that Democrats care most about the size of the net federal outlay, and care very little about what average Americans' premiums will be, or how much coverage will be expanded. (It should be noted that the CBO did only one full analysis of premiums throughout the whole market, and it is highly unlikely that they will do another before the final bill reaches Obama's desk.)
Mr. Silver, you were wrong. Your justification for why my idea would not work was incorrect. Now that I have proven you wrong, you are calling my arguments a “bunch of sh*t,” and claiming that what you said is not really what you said. Sometimes the best defense is to simply admit your mistake.
I should conclude by saying I have never argued against the theoretical need for an individual mandate if you want a universal health care system not based on a single payer model. I do not feel the Senate bill will produce a working health care system or cover enough people to be clasified as "universal." I only think people should be required to buy insurance if the government guarantees everyone access to quality affordable health insurance. I don't think the insurance in this bill is quality or affordable. I believe before we give the private insurance companies what they want most (a mandate forcing people to buy their product), we need to get more concessions out of them. I'm not ready to trade that bargaining chip yet, and we don't need to because the individual mandate will not go into effect until 2014 anyway.
Why? Because such a bill, with good reason, will be scored terribly by the CBO. You would definitely have very high premiums and would probably have a bill that was no longer deficit-neutral (the government is on the hook for some of those higher premiums to the extent that it's paying subsidies). Is Ben Nelson going to vote for a bill with a $1.1 trillion price tag that raises premiums by 30 percent?
There is no way that removing the individual mandate from the bill would increase the CBO score for net outlay of federal spending. There is not a single health care policy analyst who would not agree that what Silver said was completely wrong. In fact, I used the quotes from two of the biggest supporters of the individual mandate, Paul Krugman and Jonathan Gruber, to show that even they would admit that removing the individual mandate would decrease the CBO projection of net federal spending.
It should be noted that I purposely did not use analysis from economists friendly to my point of view. I selected economists Silver claimed to follow to prove that even they would tell him he was wrong. This is, perhaps, a finer point of debate technique lost on Silver, who is now trying to back track:
Sometimes, they raise fairly good points or expose legitimately sloppy work on behalf of "consensus" scientists. Sometimes, they are being contrarian for contrarianism's sake. And sometimes, they're just throwing a bunch of sh*t at the wall and seeing what sticks, hoping that the underlying truth or lack thereof is lost in the fog of debate.
(Hmm. . . that sounds like a perfect description of what Nate Silver has been try to do on the issue of health care policy.)
A case in point is Jon Walker at Firedoglake, who today has a post claiming that removing the individual mandate would "reduce" the CBO score. I place "reduce" in square quotes because "reduce" is not the antonym of worsen, which is what I had argued the removal of the mandate would do to the CBO's scoring of the bill. The CBO is scoring the health care bills along a number of different dimensions, the four most important of which are outlays, revenues, coverage, and impact upon premium costs.
As you can see, this statement is complete revisionist history. Silver clearly argued it would increase the CBO price tag on net federal spending, which it would not. He was using an incomplete understanding of health care policy to argue my idea of removing the individual mandate as an assurance that they will "fix it later" would be politically impossible. The truth is Olympia Snowe is opposed to the individual mandate and wants a lower CBO price tag. Removing the individual mandate could end up making it easier not harder to get votes. If he argued it would decrease the expansion of coverage, that would be a legitimate argument. That is clearly not what he was arguing, and if he had, I would have used a different rebuttal to refute the political impact of that change.
For example, 15 million of the newly covered would be in Medicaid/SCHIP. At most, dropping the individual mandate would reduce total coverage expansion to roughly 25 million instead of 31 million. The House bill expands coverage to 36 million people more cost effectively, yet no one seems to care about how many million fewer people the Senate covers. Nor does anyone seem to care that the Senate bill's lack of a real employer mandate creates a greater need to increase federal subsidies for coverage expansion. Dropping the individual mandate but strengthening the employer mandate and easing restrictions on immigrants could led to equal expansion of total coverage.
Of course, the CBO already concluded that the bill would dramatically increase average premiums in the individual market by 10-13%. That did not stop Democrats from wanting to pass the bill. If that were 15-20%, would Senate Democrats have then freaked out? Maybe, maybe not (I don't know). The recent addition of a ban on annual limits will increase average premiums, but, so far, I have seen no Democrats turn against the deal. It seems the general tone of the debate is that Democrats care most about the size of the net federal outlay, and care very little about what average Americans' premiums will be, or how much coverage will be expanded. (It should be noted that the CBO did only one full analysis of premiums throughout the whole market, and it is highly unlikely that they will do another before the final bill reaches Obama's desk.)
Mr. Silver, you were wrong. Your justification for why my idea would not work was incorrect. Now that I have proven you wrong, you are calling my arguments a “bunch of sh*t,” and claiming that what you said is not really what you said. Sometimes the best defense is to simply admit your mistake.
I should conclude by saying I have never argued against the theoretical need for an individual mandate if you want a universal health care system not based on a single payer model. I do not feel the Senate bill will produce a working health care system or cover enough people to be clasified as "universal." I only think people should be required to buy insurance if the government guarantees everyone access to quality affordable health insurance. I don't think the insurance in this bill is quality or affordable. I believe before we give the private insurance companies what they want most (a mandate forcing people to buy their product), we need to get more concessions out of them. I'm not ready to trade that bargaining chip yet, and we don't need to because the individual mandate will not go into effect until 2014 anyway.
If You Pass Reform And No One Sees It, Does It Make A Bounce?
Apparently, the political bubble in Washington is now made with a completely non-transparent slime. Democrats actually believe they will get a huge bounce from passing the Senate bill. (Via Ben Smith at Politico)
This statement from Schumer does not make any sense. No one is going to “see what it does” until 2014. They are going to pass something called "health care reform," but, for 99% of Americans, it means basically no change until 2014. That definitely does not sound like a recipe to win over a skeptical public.
I simply do not believe people will be more happy about this pile of broken promises and corporate giveaways, because after it passes nothing (good or bad) happens until half way through Obama's second term. The damage Obama has done to the base by refusing to fight for real reform will not be repaired easily. I would also definitely not want to be a Democrat who voted for this needing to explain to everyone during my 2010 and 2012 campaigns why nothing has been reformed.
The best possible outcome for Democrats seems to be the hope that people who are angry about this bill will find something new to be even more angry about by the 2010 midterm election. The worst possible outcome is that people still fear what will happen when the bill goes into effect and blame Democrats for everything that is wrong with the health care system they claimed to have fixed. Either way, I don't see how you get more than a dead cat bounce out of a bill no one will feel for years.
[A]n official predicted to me the other day that Obama's numbers would hit 60 after the health care bill passes, and Chuck Schumer seems to think roughly the same thing: that the public polling on the Democratic reform bill will turn around "soon."
When people see what is in this bill and when people see what it does, they will come around," Schumer said. "The reason people are negative is not the substance of the bill, but the fears that the opponents have laid out. When those fears don't materialize, and people see the good in the bill, the numbers are going to go up."
This statement from Schumer does not make any sense. No one is going to “see what it does” until 2014. They are going to pass something called "health care reform," but, for 99% of Americans, it means basically no change until 2014. That definitely does not sound like a recipe to win over a skeptical public.
I simply do not believe people will be more happy about this pile of broken promises and corporate giveaways, because after it passes nothing (good or bad) happens until half way through Obama's second term. The damage Obama has done to the base by refusing to fight for real reform will not be repaired easily. I would also definitely not want to be a Democrat who voted for this needing to explain to everyone during my 2010 and 2012 campaigns why nothing has been reformed.
The best possible outcome for Democrats seems to be the hope that people who are angry about this bill will find something new to be even more angry about by the 2010 midterm election. The worst possible outcome is that people still fear what will happen when the bill goes into effect and blame Democrats for everything that is wrong with the health care system they claimed to have fixed. Either way, I don't see how you get more than a dead cat bounce out of a bill no one will feel for years.
35 Ways To Fix The Bad Senate Health Bill
This Senate bill is bad and there are many ways to improve it. Right now, it is not real reform--it is only a corporate giveaway that might trickle down to help a few Americans. The ideas listed here are a guide to transform this legislation into real reform.
If they implement a vast majority of these reforms, progressives should only then embrace the individual mandate. Until the government takes real steps to ensure that people actually have access to high-quality, affordable health insurance it is immoral to force people to buy expensive, junk insurance from private corporations.
Right now, the bill is only a big corporate giveaway masquerading as reform--reform that will only enrich, empower, and entrench the enemies of real reform. Only if they add the bulk of these ideas could you ever honestly call the bill reform, and, so, make it worth passing.
- Add a robust public option open to all Americans.
- Remove the rollback of a woman's right to choose.
- Repeal the anti-trust exemption for private insurance companies.
- Add early Medicare buy-in.
- Add a real employer mandate.
- Fix the excise tax that would reduce the quality of many Americans’ insurance. This can be done by properly indexing it so that it forever remains only a tax on “Cadillac” plans.
- Move up the start date of reform to as soon as possible. Three years is too long!
- Increase the affordability tax credits to individuals.
- Expand Medicaid to 150% of FPL.
- Reduce the maximum annual out-of-pocket limit to 5% of income.
- Move up state waiver for innovation to 2014 and add ERISA waiver. The state waiver for innovation is a good idea, but having it start in 2017 creates a bureaucratic nightmare of putting in place one reform only to replace it a few years later. We need to fix our system now, not have states start working toward a real solution a decade from now.
- Give states that set up “basic health programs” 100% of the money, and allow them to use the program for people above 200% of FPL.
- Allow for drug re-importation so Americans can get cheaper drugs from Canada or Europe.
- Give Medicare the power to directly negotiate for lower drug prices.
- Give the government the power to negotiate for lower drug prices on behalf of all Americans (like every other industrialized country does to bring down pharmaceutical prices).
- Create a national exchange with a strong regulation enforcer instead of state-based exchanges with weak local insurance commissioners.
- Force all non-HMO insurance plans on the exchange (or at least on the new OPM exchange) to work with the exchange commissioners to collectively negotiate a single provider reimbursement rate for all insurance plans (as it is in Switzerland, Belgium, and The Netherlands.)
- Add truly strong risk adjustment mechanisms to force competition based on quality instead of trying to dump sick customers (as is done in The Netherlands).
- Increase the actuarial value of the minimum qualified plans offered on the exchange and base subsidies on the gold level (80% actuarial value) instead of silver level plan (70% actuarial value).
- Force all insurance companies on the exchange to offer at least one precisely designed high quality insurance plan. This will allow true apple-to-apple comparisons, and make it harder for insurance companies to game the system.
- Greatly reduce the amount of plan design leeway given to insurance companies to reduce their ability to game the system.
- Make it illegal to sell basic health insurance for profit, like in almost every first-world country on Earth.
- At the least, allow only non-profit insurance plans to take part in the new exchanges (or OPM exchange).
- Reduce the community rating based on age to at most a 1:2 ratio with age rating bands. (one price for all 18-30 year olds, one price for 30-45 year olds, and one price for all 45-64 year olds).
- Make minimum medical loss ratio 92%. (Try to do this in way to get around the CBO.)
- At the very least, remove the MLR loophole for the individual market.
- Allow state and local governments to apply for grants from the CO-OP program.
- Allow the co-ops to sell insurance to anyone, not just the small group and individual markets.
- Allow undocumented immigrants to buy health insurance with their own money on the new exchange.
- Make all legal immigrants eligible for all public health care programs right away, instead of creating a five year wait.
- Eliminate direct-to-consumer advertising for prescription medication.
- Provide enough money to give every American access to a community health care center.
- Follow the FTC recommendations and create a real pathway for biosimilars to create generic forms of the most expensive medications in this country.
- Create a Government-run HMO option modeled on the VA system.
- Scrap the whole bill and replace it with a single payer “Medicare-for-all” system.
If they implement a vast majority of these reforms, progressives should only then embrace the individual mandate. Until the government takes real steps to ensure that people actually have access to high-quality, affordable health insurance it is immoral to force people to buy expensive, junk insurance from private corporations.
Right now, the bill is only a big corporate giveaway masquerading as reform--reform that will only enrich, empower, and entrench the enemies of real reform. Only if they add the bulk of these ideas could you ever honestly call the bill reform, and, so, make it worth passing.
Senate Health Care Bill Is Built On Obama's Broken Promises
Ezra Klein is trying to make the absurd claim that this Senate bill closely resembles Obama's campaign promises on health care reform:
This claim, I feel, is just not based in reality. The following is a list of all the promises broken:
Promise:
The CBO has concluded that premiums for employer-provided insurance will not drop by anything close to $2,500 per year. Without reforms like drug re-importation, direct government drug price negotiations, a robust public option, or a central provider reimbursement negotiator, I see no way this reduction can happen with the Senate bill.
The Senate bill also breaks the key promise that “you can keep the insurance you have.” The excise tax in the Senate bill is designed to make your health insurance worse. It will force your employer to select plans with less coverage and higher co-pays. If you are one of the roughly 30 million Americans in 2016 who's insurance will be lessened because of the excise tax, your current health insurance will definitely change for the worse. Obama attacked John McCain throughout the campaign because his plan would tax your health insurance benefits. Now Obama is going back on his key distinction from John McCain by promoting a bill that does in fact tax your health insurance benefits.
Promise:
The Senate bill will use state-based exchanges. This is not some minor technical distinction. By using state-based exchanges, it relies on state insurance commissioners to enforce the new regulations. State insurance commissioners do not have a good track record policing the insurance companies. They often lack the power, funding, or will to hold them accountable. Regulation without strong enforcement is meaningless.
Promise:
This is a pure broken promise. Obama traded it away to PhRMA as part of a secret backroom deal (which itself breaks another promise: to make all negotiations public on C-SPAN). He actively worked to kill drug re-importation when it had a real chance of being added to the bill.
Promise:
Again, this is another broken promise that was part of Obama’s secret sweetheart deal with PhRMA.
Promise:
There is no public option in the Senate bill. In the health care system that Obama promise the public option was not just some “small sliver.” It was going to be the benchmark against which all private plans would need to be measured.
Promise:
I do not believe the subsidized premiums are affordable and the subsidies are only for the 70% actuarial plans. Plans with this low of an actuarial will likely have high co-pays and deductibles.
Promise:
The Senate bill does not have a real employer mandate based on payroll. It only has a small “free rider” provision. Because of the lack of a real employer mandate, the amount of employer-provided coverage will drop by $5 million.
Other promises not part of the official campaign plan document:
During the 2008 primary campaign, Obama really pushed that a key distinction between Hillary Clinton and himself was that he promised not to include an individual mandate in his reform package. This bill has an individual mandate.
Obama attacked John McCain for planning to tax health insurance benefits. This bill taxes employer provide benefits.
Candidate Obama promised to make the negotiations public, and, clearly, that did not happen.
To recap: the Senate bill taxes benefits and will result in millions of Americans’ insurance plans changing for the worse. It is not expected to bring down premiums by $2,500 a year. There is an individual mandate forcing you to buy private health insurance, but no real employer mandate. The subsidies will be insufficient to truly make insurance affordable. It does not create a national exchange or a public option. It does not allow for drug re-importation or direct drug price negotiations by Medicare. All the negotiations were conducted in secret, and clearly to the detriment of the American consumer. It is a massive rollback of women's reproductive rights, something Obama promised to defend vigorously. These are not minor changes. These are core promises of the Obama campaign.
This Senate health care reform bill is nothing like what Obama campaigned on. Obama's two biggest campaign promises about health care reform--that he repeated over and over again (no individual mandate and no taxes on employer-provided heath insurance)--were both completely broken. If Ezra Klein wants to argue this is still a good bill, he has that right, but he should not try to re-write history. I studied Obama's campaign promises closely during the campaign, and this is nothing like the health care reform he promised. He did almost everything he promised he would not do, and he kept almost nothing of his most progressive promises to stand up to the powerful industry lobbies.
The health-care bill that looks likely to clear the Senate this week is not very close to the health-care bill most liberals want. But it is very close to the health-care bill that Barack Obama promised.
This claim, I feel, is just not based in reality. The following is a list of all the promises broken:
Promise:
Under the plan, if you like your current health insurance, nothing changes, except your costs will go down by as much as $2,500 per year.
The CBO has concluded that premiums for employer-provided insurance will not drop by anything close to $2,500 per year. Without reforms like drug re-importation, direct government drug price negotiations, a robust public option, or a central provider reimbursement negotiator, I see no way this reduction can happen with the Senate bill.
The Senate bill also breaks the key promise that “you can keep the insurance you have.” The excise tax in the Senate bill is designed to make your health insurance worse. It will force your employer to select plans with less coverage and higher co-pays. If you are one of the roughly 30 million Americans in 2016 who's insurance will be lessened because of the excise tax, your current health insurance will definitely change for the worse. Obama attacked John McCain throughout the campaign because his plan would tax your health insurance benefits. Now Obama is going back on his key distinction from John McCain by promoting a bill that does in fact tax your health insurance benefits.
Promise:
Barack Obama and Joe Biden’s new National Health Insurance Exchange will also help increase competition by insurers.
The Senate bill will use state-based exchanges. This is not some minor technical distinction. By using state-based exchanges, it relies on state insurance commissioners to enforce the new regulations. State insurance commissioners do not have a good track record policing the insurance companies. They often lack the power, funding, or will to hold them accountable. Regulation without strong enforcement is meaningless.
Promise:
Allow consumers to import safe drugs from other countries. The second-fastest growing type of health expenses is prescription drugs. Pharmaceutical companies should profit when their research and development results in a groundbreaking new drug. But some companies are exploiting Americans by dramatically overcharging U.S. consumers. These companies are selling the exact same drugs in Europe and Canada but charging Americans a 67 percent premium. Barack Obama and Joe Biden will allow Americans to buy their medicines from other developed countries if the drugs are safe and prices are lower outside the U.S.
This is a pure broken promise. Obama traded it away to PhRMA as part of a secret backroom deal (which itself breaks another promise: to make all negotiations public on C-SPAN). He actively worked to kill drug re-importation when it had a real chance of being added to the bill.
Promise:
Allow Medicare to negotiate for cheaper drug prices. The 2003 Medicare Prescription Drug Improvement and Modernization Act bans the government from negotiating down the prices of prescription drugs, even though the Department of Veterans Affairs’ negotiation of prescription drug prices with drug companies has garnered significant savings for taxpayers. Barack Obama and Joe Biden will repeal the ban on direct negotiation with drug companies and use the resulting savings, which could be as high as $30 billion, to further invest in improving health care coverage and quality.
Again, this is another broken promise that was part of Obama’s secret sweetheart deal with PhRMA.
Promise:
Through the Exchange, any American will have the opportunity to enroll in the new public plan or an approved private plan... The Exchange will require that all the plans offered are at least as generous as the new public plan and meet the same standards for quality and efficiency.
There is no public option in the Senate bill. In the health care system that Obama promise the public option was not just some “small sliver.” It was going to be the benchmark against which all private plans would need to be measured.
Promise:
Affordable premiums, co-pays and deductibles. Participants will be charged fair premiums and minimal co-pays for deductibles for preventive services.
I do not believe the subsidized premiums are affordable and the subsidies are only for the 70% actuarial plans. Plans with this low of an actuarial will likely have high co-pays and deductibles.
Promise:
EMPLOYER CONTRIBUTION. Large employers that do not offer meaningful coverage or make a meaningful contribution to the cost of quality health coverage for their employees will be required to contribute a percentage of payroll toward the costs of the national plan. Small businesses will be exempt from this requirement.
The Senate bill does not have a real employer mandate based on payroll. It only has a small “free rider” provision. Because of the lack of a real employer mandate, the amount of employer-provided coverage will drop by $5 million.
Other promises not part of the official campaign plan document:
During the 2008 primary campaign, Obama really pushed that a key distinction between Hillary Clinton and himself was that he promised not to include an individual mandate in his reform package. This bill has an individual mandate.
Obama attacked John McCain for planning to tax health insurance benefits. This bill taxes employer provide benefits.
Candidate Obama promised to make the negotiations public, and, clearly, that did not happen.
To recap: the Senate bill taxes benefits and will result in millions of Americans’ insurance plans changing for the worse. It is not expected to bring down premiums by $2,500 a year. There is an individual mandate forcing you to buy private health insurance, but no real employer mandate. The subsidies will be insufficient to truly make insurance affordable. It does not create a national exchange or a public option. It does not allow for drug re-importation or direct drug price negotiations by Medicare. All the negotiations were conducted in secret, and clearly to the detriment of the American consumer. It is a massive rollback of women's reproductive rights, something Obama promised to defend vigorously. These are not minor changes. These are core promises of the Obama campaign.
This Senate health care reform bill is nothing like what Obama campaigned on. Obama's two biggest campaign promises about health care reform--that he repeated over and over again (no individual mandate and no taxes on employer-provided heath insurance)--were both completely broken. If Ezra Klein wants to argue this is still a good bill, he has that right, but he should not try to re-write history. I studied Obama's campaign promises closely during the campaign, and this is nothing like the health care reform he promised. He did almost everything he promised he would not do, and he kept almost nothing of his most progressive promises to stand up to the powerful industry lobbies.
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